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Businesswomen in Germany and Their Performance by Ethnicity: It Pays to Be Self-Employed

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  • Amelie Constant

Abstract

In this paper I assert that the entrepreneurial spirit can also exist in salaried jobs. I study the determinants of wages and the labor market success of two kinds of entrepreneurial women in Germany - self-employed and salaried businesswomen - and investigate whether ethnicity is important in these challenging jobs. Employing data from the German Socioeconomic Panel I estimate selection adjusted wage regressions for both types of businesswomen by country of origin. I find that self-employment offers businesswomen a lucrative avenue with higher monetary rewards, albeit for a shorter spell. If salaried businesswomen went into self-employment, they would receive considerably higher wages and for at least 30 years. However, if self-employed businesswomen went into salaried jobs, their wages would decline, suggesting that it is the self-employment sector that offers better opportunities and monetary success. Self-employed women in Germany fare well and most importantly, success does not depend on their ethnicity.

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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 815.

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Length: 21 p.
Date of creation: 2008
Date of revision:
Handle: RePEc:diw:diwwpp:dp815

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Keywords: Businesswomen; Entrepreneurship; Self-employment; Economics of Minorities; Immigrants wage differentials;

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References

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  1. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
  2. Amelie Constant & Klaus F. Zimmermann, 2004. "Self-Employment Dynamics across the Business Cycle: Migrants versus Natives," Discussion Papers of DIW Berlin 455, DIW Berlin, German Institute for Economic Research.
  3. Constant, Amelie F. & Zimmermann, Klaus F., 2004. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," IZA Discussion Papers 1440, Institute for the Study of Labor (IZA).
  4. Yannis Georgellis & Howard Wall, 2005. "Gender differences in self-employment," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 321-342.
  5. Taylor, Mark P, 2001. "Self-Employment and Windfall Gains in Britain: Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 68(272), pages 539-65, November.
  6. Clark, Kenneth & Drinkwater, Stephen, 1998. "Ethnicity and Self-Employment in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(3), pages 383-407, August.
  7. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  8. Constant, Amelie F. & Shachmurove, Yochanan, 2003. "Entrepreneurial Ventures and Wage Differentials Between Germans and Immigrants," IZA Discussion Papers 879, Institute for the Study of Labor (IZA).
  9. Amelie Constant, 2006. "Female Proclivity to the World of Business," Kyklos, Wiley Blackwell, vol. 59(4), pages 465-480, November.
  10. Henning Lohmann, 2001. "Self-employed or employee, full-time or part-time? Gender differences in the determinants and conditions for self-employment in Europe and the US," MZES Working Papers 38, MZES.
  11. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  12. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  13. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  14. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
  15. Lofstrom, Magnus, 1999. "Labor Market Assimilation and the Self-Employment Decision of Immigrant Entrepreneurs," IZA Discussion Papers 54, Institute for the Study of Labor (IZA).
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Cited by:
  1. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Report No. 41: Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute for the Study of Labor (IZA).

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