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

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Author Info
Amelie Constant

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

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Find related papers by JEL classification:
M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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  1. Constant, Amelie & Shachmurove, Yochanan, 2003. "Entrepreneurial Ventures and Wage Differentials Between Germans and Immigrants," IZA Discussion Papers 879, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Yannis Georgellis & Howard J. Wall, 2004. "Gender differences in self-employment," Working Papers 1999-008, Federal Reserve Bank of St. Louis. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!]
  4. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March. [Downloadable!] (restricted)
  5. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May. [Downloadable!] (restricted)
  8. 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.
  9. Magnus Lofstrom, 2002. "Labor market assimilation and the self-employment decision of immigrant entrepreneurs," Journal of Population Economics, Springer, vol. 15(1), pages 83-114. [Downloadable!] (restricted)
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  10. Amelie Constant, 2006. "Female Proclivity to the World of Business," Kyklos, Blackwell Publishing, vol. 59(4), pages 465-480, November. [Downloadable!] (restricted)
  11. Amelie Constant & Klaus Zimmermann, 2006. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," Small Business Economics, Springer, vol. 26(3), pages 279-300, 04. [Downloadable!] (restricted)
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  12. 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. [Downloadable!]
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  13. Taylor, Mark P, 1999. "Self-Employment and Windfall Gains in Britain: Evidence From Panel Data," CEPR Discussion Papers 2084, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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