U.S. Sole Proprietorships: A Gender Comparison, 1985-2000

This paper analyzes one of the best sets of small business data – 1985-2000 U.S. sole proprietorship data that Statistics of Income Division, Internal Revenue Service, produces for researchers. It explains the differences in business owners across the nation from 1985 to 2000 by looking into sole proprietorships by gender in general and by business size, owner’s marital status, 10 industrial classifications, six broad industry categories, and the 10 most populous states in particular. This paper sheds new light on previous research puzzles such as firm-sensitivities and gender segregations in business activities and earnings, and the possible reason for certain existing gender differences. Women sole proprietors grew faster than men in terms of the number of businesses and net income during 1985-2000. Male sole proprietors were more firm size sensitive and disparate than women in business earnings. Gender segregation seemed to be clear when looking into industrial classifications but less so across six broad industry categories. Florida had the highest sole proprietorship growth between 1985 and 2000. A higher proportion of women than men sole proprietors bore the responsibility of taking care of their children. Lack of family support is a possible reason female sole proprietors earned less on average than their counterparts did during the same period. A set of micro data from SOI, rather than aggregated tabulations, might result in more robust findings.