Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model
Why 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.
|Date of creation:||2009|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hannu Tervo & Mika Haapanen, 2005.
"Self-employment duration in urban and rural locations,"
ERSA conference papers
ersa05p315, European Regional Science Association.
- Mika Haapanen & Hannu Tervo, 2009. "Self-employment duration in urban and rural locations," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2449-2461.
- Borghans Lex & Golsteyn Bart & Heckman James & Meijers Huub, 2009.
"Gender Differences in Risk Aversion and Ambiguity Aversion,"
ROA Research Memorandum
005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
- Lex Borghans & Bart H. H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 649-658, 04-05.
- Lex Borghans & Bart H.H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," NBER Working Papers 14713, National Bureau of Economic Research, Inc.
- Borghans, Lex & Golsteyn, Bart H.H. & Heckman, James J. & Meijers, Huub, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," IZA Discussion Papers 3985, Institute for the Study of Labor (IZA).
- Borjas, George J & Bronars, Stephen G, 1989.
"Consumer Discrimination and Self-employment,"
Journal of Political Economy,
University of Chicago Press, vol. 97(3), pages 581-605, June.
- Disney, Richard & Gathergood, John, 2009.
"Housing wealth, liquidity constraints and self-employment,"
Elsevier, vol. 16(1), pages 79-88, January.
- Richard Disney & John Gathergood, "undated". "Housing Wealth, Liquidity Constraints and Self-Employment," Discussion Papers 08/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Frank M. Fossen, 2011.
"Gender Differences in Entrepreneurial Choice and Risk Aversion - A Decomposition Based on a Microeconometric Model,"
- 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.
- Frank M. Fossen, 2009. "Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model," Discussion Papers of DIW Berlin 936, DIW Berlin, German Institute for Economic Research.
- Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
- Marco Caliendo & Frank Fossen & Alexander Kritikos, 2009. "Risk attitudes of nascent entrepreneurs–new evidence from an experimentally validated survey," Small Business Economics, Springer, vol. 32(2), pages 153-167, February.
- repec:uwp:jhriss:v:8:y:1973:i:4:p:436-455 is not listed on IDEAS
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 29-36, May.
- Schuetze, Herb J., 2000.
"Taxes, economic conditions and recent trends in male self-employment: a Canada-US comparison,"
Elsevier, vol. 7(5), pages 507-544, September.
- Herb J. Schuetze, "undated". "Taxes, Economic Conditions And Recent Trends in Male Self-Employment: A Canada-U.S. Comparison," Canadian International Labour Network Working Papers 11, McMaster University.
- Cullen, Julie Berry & Gordon, Roger H., 2007. "Taxes and entrepreneurial risk-taking: Theory and evidence for the U.S," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1479-1505, August.
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- John Heaton & Deborah Lucas, 2000. "Portfolio Choice and Asset Prices: The Importance of Entrepreneurial Risk," Journal of Finance, American Finance Association, vol. 55(3), pages 1163-1198, 06.
- Fairlie, Robert W, 1999.
"The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment,"
Journal of Labor Economics,
University of Chicago Press, vol. 17(1), pages 80-108, January.
- Fairlie, Robert, 2014. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt49c4n0fg, Department of Economics, UC Santa Cruz.
- repec:ntj:journl:v:55:y:2002:i:n._1:p:5-24 is not listed on IDEAS
- Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages 140-155, March.
- Frank Fossen & Viktor Steiner, 2009. "Income taxes and entrepreneurial choice: empirical evidence from two German natural experiments," Empirical Economics, Springer, vol. 36(3), pages 487-513, June.
- Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-266, May.
- Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
- Mats Hammarstedt, 2006. "The predicted earnings differential and immigrant self-employment in Sweden," Applied Economics, Taylor & Francis Journals, vol. 38(6), pages 619-630.
- Kanbur, S M Ravi, 1982. "Entrepreneurial Risk Taking, Inequality, and Public Policy: An Application of Inequality Decomposition Analysis to the General Equilibrium Effects of Progressive Taxation," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 1-21, February.
- Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
- Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
- F. L. Jones, 1983. "On Decomposing the Wage Gap: A Critical Comment on Blinder's Method," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 126-130.
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp936. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.