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What explains the gender earnings gap in self-employment? A decomposition analysis with German data

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  • Lechmann, Daniel S. J.
  • Schnabel, Claus

Abstract

Using a large data set for Germany, we show that both the raw and the unexplained gender earnings gap are higher in self-employment than in paid employment. Applying an Oaxaca-Blinder decomposition, more than a quarter of the difference in monthly self-employment earnings can be traced back to women working fewer hours than men. In contrast variables like family background, working time flexibility and career aspirations do not seem to contribute much to the gender earnings gap, suggesting that self-employed women do not earn less because they are seeking work-family balance rather than profits. Differences in human capital endowments account for another 13 percent of the gap but segregation does not contribute to the gender earnings gap in a robust way. -- Mit einem großen Datensatz für Deutschland zeigen wir, dass sowohl der gesamte geschlechtsspezifische Verdienstunterschied als auch dessen unerklärter Teil bei Selbständigen größer ausfallen als bei abhängig Beschäftigten. Gemäß einer Oaxaca-Blinder-Zerlegung ist über ein Viertel des Unterschieds im Monatsverdienst von Selbständigen darauf zurückzuführen, dass Frauen kürzere Arbeitszeiten haben als Männer. Dagegen scheinen Variablen wie Familienhintergrund, Arbeitszeitflexibilität und Karriereaspiration nicht substanziell zum Geschlechter-Verdienstdifferenzial beizutragen. Dies legt nahe, dass selbständige Frauen nicht deshalb weniger verdienen, weil sie eher an der Vereinbarkeit von Arbeit und Familie und weniger an Gewinnerzielung interessiert sind. Unterschiede in der Humankapitalausstattung erklären weitere 13 Prozent des Differenzials, doch Segregation spielt keine eindeutige Rolle.

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 77.

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Date of creation: 2012
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Handle: RePEc:zbw:faulre:77

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Web page: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english-version/
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Keywords: earnings differential; entrepreneurship; gender pay gap; Germany; self-employed; self-employment;

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  1. Williams, Donald R., 2002. "Returns to education and experience in self-employment: Evidence from Germany," IRISS Working Paper Series 2002-04, IRISS at CEPS/INSTEAD.
  2. Gottschalk, Sandra & Niefert, Michaela, 2011. "Gender differences in business success of German start-up firms," ZEW Discussion Papers 11-019, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, April.
  4. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, April.
  5. Gema Álvarez & Carlos Gradín & M. Soledad Otero, 2009. "Self-employment in Spain: Transition and earnings differential," Working Papers 0907, Universidade de Vigo, Departamento de Economía Aplicada.
  6. Semykina, Anastasia & Linz, Susan J., 2007. "Gender differences in personality and earnings: Evidence from Russia," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 387-410, June.
  7. Leung, Danny, 2006. "The male/female earnings gap and female self-employment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 759-779, October.
  8. Kristy Eastough & Paul W. Miller, 2003. "The Gender Wage Gap in Paid and Self-Employment in Australia," Economics Discussion / Working Papers 03-24, The University of Western Australia, Department of Economics.
  9. Aysit Tansel, 2001. "Wage Earners, Self Employed and Gender in the Informal Sector in Turkey," Working Papers 0102, Economic Research Forum, revised Jan 2001.
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