Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model
AbstractWhy are female entrepreneurs so rare? Women have both to a lower entry rate into selfemployment and a higher exit rate in Germany. To explain the gender gap, a structural microeconometric model of the transition rates is estimated, which includes a standard risk aversion parameter. As inputs into the model, the expected value and variance of earnings from self-employment and dependent employment are estimated separately by gender, accounting for non-random selection into the employment states. The gender differential in the transition rates is decomposed using a novel extension of the Blinder-Oaxaca technique for nonlinear models. Women's higher estimated risk aversion is found to explain the largest part of their higher exit rate, but only a small part of their lower entry rate.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 936.
Length: 41 p.
Date of creation: 2009
Date of revision:
Publication status: Published in: Applied Economics 44 (2012) Iss. 14, 1795-1812
Entrepreneurship; self-employment; risk aversion; gender differential; Nonlinear Blinder-Oaxaca Decomposition;
Other versions of this item:
- Frank M. Fossen, 2012. "Gender differences in entrepreneurial choice and risk aversion -- a decomposition based on a microeconometric model," Applied Economics, Taylor & Francis Journals, vol. 44(14), pages 1795-1812, May.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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- Lechmann, Daniel S. J., 2013. "Can working conditions explain the return-to-entrepreneurship puzzle?," Discussion Papers 86, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Parker, Simon C., 2013. "Do serial entrepreneurs run successively better-performing businesses?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 652-666.
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