Why the Gap? Determinants of Self-Employment Earnings Differentials for Male and Female Millennials in the US
- 852 Downloads
We investigated gender differences in self-employment earnings for US Millennials, and whether differences could be attributed to individual characteristics, business characteristics, or factors related to household formation, such as marriage and parenthood. Using a nationally representative dataset of US youth, we found significant earnings differences favoring men and suggestive evidence of a “motherhood earnings penalty” (Budig and England 2001, p. 204–225). After controlling for business characteristics, however, the effect of gender itself was not statistically significant and the effect of motherhood only approached statistical significance, suggesting that gendered choices and paths explain earnings differences, not gender or motherhood per se. Future work would benefit from a larger dataset and should explore the role of work location and education in earnings.
KeywordsSelf-employment Women’s entrepreneurship Earnings gap Motherhood wage penalty Millennials
An earlier version of this paper was presented at the poster session of the Population Association of America (PAA) 2014 conference in Boston, Massachusetts. We are grateful for feedback offered by conference attendees during that session.
- American Community Survey (2012). American Community Survey 1-Year Estimates 2012, Table S2002. US Census Bureau. Retrieved from American FactFinder, http://factfinder2.census.gov.
- Ayres, S. (2013). The high cost of youth unemployment. Retrieved from https://www.americanprogress.org/issues/labor/report/2013/04/05/59428/the-high-cost-of-youth-unemployment/.
- Becker, G. S. (1991). A treatise on the family. Cambridge: Harvard University Press.Google Scholar
- Bregger, J. E. (1996). Measuring self-employment in the United States. Monthly Labor Review, 119(1/2), 3–9. Retrieved from http://www.bls.gov/mlr/1996/01/art1full.pdf.
- Bureau of Labor Statistics. (2011). The Employment Situation—January 2011 (USDL-11-0129). Retrieved from http://www.bls.gov/news.release/archives/empsit_02042011.pdf.
- Bureau of Labor Statistics. (2013). National Occupational Employment and Wage Estimates. Retrieved from http://www.bls.gov/oes/2013/may/oes_nat.htm#31-0000.
- Caputo, R. K., & Dolinsky, A. (1998). Women’s choice to pursue self- employment: The role of financial and human capital of household members. Journal of Small Business Management, 36(3), 8–17.Google Scholar
- Correll, S.J., Benard, S., & Paik, I. (2007). Getting a job: Is there a motherhood penalty? American Journal of Sociology, 112(5), 1297–1339. Retrieved from http://www.jstor.org/stable/10.1086/511799.
- Fairlie, R. W. (2005). Self-employment, entrepreneurship, and the NLSY79. Monthly Labor Review, 128(2), 40–47. Retrieved from http://www.bls.gov/opub/mlr/2005/02/art6full.pdf.
- Fairlie, R. W., & Robb, A. (2010). Disparities in capital access between minority and non-minority-owned businesses: the troubling reality of capital limitations faced by MBEs. Retreived from http://www.mbda.gov/sites/default/files/DisparitiesinCapitalAccessReport.pdf.
- Furstenberg, F. F., Jr. (2010). On a new schedule: Transitions to adulthood and family change. The Future of Children, 20(1). Retrieved from http://www.jstor.org/stable/27795060.
- Geobey, S. (2013). The young and the jobless: Youth unemployment in Ontario. Ottawa: Canadian Centre for Policy Alternatives. Retrieved from http://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario%20Office/2013/09/Young_and_jobless_final3.pdf.
- Harmon, C., Oosterbeek, H., & Walker, I. (2000). The returns to education: A review of evidence, issues and deficiencies in the literature. Centre for the Economics of Education Discussion Paper (5). Retrieved from http://cee.lse.ac.uk/ceedps/ceedp05.pdf.
- Heckman, J.J. (1976). Estimates of a human capital production function embedded in a life-cycle model of labor supply. National Bureau of Economic Research. Retrieved from http://ideas.repec.org/h/nbr/nberch/3963.html.
- Hipple, S.F. (2010). Self-employment in the United States. Monthly Labor Review, 133(9), 17–32. Retrieved from http://www.bls.gov/opub/mlr/2010/09/art2full.pdf.
- Karoly, L. A., & Zissimopolous, J. (2004). Self-employment among older US workers. Monthly Labor Review, 127(7), 24–47. Retrieved from http://www.bls.gov/opub/mlr/2004/07/art3full.pdf.
- Kew, J., Herrington, M., Litovsky, Y., & Gale, H. (2013). The state of global youth entrepreneurship. London: Global Entrepreneurship Monitor. Retrieved from http://www.gemconsortium.org/docs/2835/gem-ybi-youth-report-the-state-of-global-youth-entrepreneurship.
- Klapper, L. F., & Parker, S. C. (2011). Gender and the business environment for new firm creation. The World Bank Research Observer 26(2), 237–257. Retrieved from http://documents.worldbank.org/curated/en/2011/08/18587669/gender-business-environment-new-firm-creation.
- Layne, C. (2013). Changes in self-employment: 2010–2011. American Community Survey Brief 11/21. Retrieved from http://www.census.gov/prod/2013pubs/acsbr11-21.pdf .
- Lechmann, D.S.J., & Schnabel, C. (2012). What explains the gender earnings gap in self-employment? A decomposition analysis with German data, Friedrich-Alexander-Universitat Discussion Papers No. 77. Retrieved from http://www.arbeitsmarkt.wiso.uni-erlangen.de/pdf/diskussionspapiere/dp77.pdf.
- Levine, R., & Rubenstein, Y. (2013). Does entrepreneurship pay? The Michael Bloombergs, the hot dog vendors, and the returns to self-employment. Working Paper: Haas School of Business. Retrieved from http://faculty.haas.berkeley.edu/ross_levine/Papers/2012_7SEP_entrepreneurship.pdf.
- Loscocco, K., Robinson, J., Hall, R.H., & Allen, J.K. (1991). Gender and small business success: An inquiry into women’s relative disadvantage. Social Forces, 70(1), 65–85. Retrieved from http://www.jstor.org/stable/2580062.
- Mincer, J. (1974). Schooling, experience and earnings. National Bureau of Economic Research. http://papers.nber.org/books/minc74-1.
- Pew Research Center. (2010). Millennials: A portrait of generation next. Confident. Connected. Open to change. Washington: Pew Research Center. Retrieved from http://www.pewsocialtrends.org/files/2010/10/millennials-confident-connected-open-to-change.pdf.
- Pew Research Center. (2013). On pay gap, Millennial women near parity, for now: Despite gains, many see roadblocks ahead. Washington: Pew Research Center. Retrieved from http://www.pewsocialtrends.org/2013/12/11/on-pay-gap-millennial-women-near-parity-for-now/.
- Roche, K. (2013). Reconciling gender differences in the returns to education in self-employment: Does occupation matter? The Journal of Socio-Economics, 44(C), 112–119. doi: doi: 10.1016/j.socec.2013.02.022.
- Sayer, L. C., England, P., Bittman, M., & Bianchi, S. M. (2009). How long is the second (plus first) shift? Gender differences in paid, unpaid, and total work time in Australia and the United States. Journal of Comparative Family Studies, 40(4), 523–545. Retrieved from http://www.jstor.org/discover/10.2307/41604549.
- Sum, A., Khatiwada, I., Trubskyy, M., & Palma, S. (2014). The plummeting labor market fortunes of teens and young adults. Washington: Brookings Institution. Retrieved from http://www.brookings.edu/research/interactives/2014/labor-market-metro-areas-teens-young-adults.
- Sutton, P.D., Hamilton, B.E., & Mathews, T.J. (2011). Recent decline in births in the United States, 2007–2009 (NCHS Data Brief: No. 60). Hyattsville, MD: National Center for Health Statistics. Retrieved from http://www.cdc.gov/nchs/data/databriefs/db60.htm.
- UN Secretary General. (2013). Transforming unemployed youth into entrepreneurs part of solution to global crisis [Press release]. New York: United Nations. Retrieved from http://www.un.org/press/en/2013/sgsm15135.doc.htm.
- Wickrama, K. A. S., Simons, L. G., & Baltimore, D. (2012). The influence of ethnicity and adverse life experiences during adolescence on young adult socioeconomic attainment: The moderating role of education. Journal of Youth and Adolescence, 41(11), 1472–1487. doi: 10.1007/s10964-012-9764-9.CrossRefGoogle Scholar
- Williams, D. R. (2002). Returns to education and experience in self-employment: Evidence from Germany. IRISS Working Papers 4, Retrieved from http://www.diw.de/documents/dokumentenarchiv/17/39221/williams.pdf
- Youderian, C. (2012). The returns to education for entrepreneurs. Retrieved from K-State Electronic Theses, Dissertations and Reports database. http://hdl.handle.net/2097/14068.