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Career or Flexible Work Arrangements? Gender Differences in Self-employment in a Young Market Economy

Journal of Family and Economic Issues volume 41, pages 70–95 (2020)Cite this article

Abstract

We examined supply-side determinants of transition from the wage and salary sector to self-employment of women and men living Poland. The empirical analysis was made possible due to a unique and under explored longitudinal survey—Social Diagnosis—that contains rare indicators such as job preferences and work events. The empirical results in the 2007–2015 period indicated that women and men transitioning into self-employment were differently motivated. In terms of job attributes, women found independence at work and for those in professional occupations a job matching their competences as a desirable job attribute, while for men the lack of stress, a good salary and independence was key. The analysis of work events and its influence on self-employment weakly confirmed the glass-ceiling hypothesis. In line with other research, our analysis indicated that financial constraints strongly determined the entry into self-employment. A key human capital determinant was past entrepreneurial experience indicating a slow, cautious transition process into self-employment.

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Notes

  1. For example, due to an underdeveloped social infrastructure.

  2. Also, referred to as the work and family conflict theory.

  3. This theoretical perspective is also know as the default theory.

  4. This is also known as the default theory.

  5. Although the main industry branches were directly owned by the state under communism, a large sector of legal self-employment and small-scale private businesses (such as restaurants, small shops and services) remained in private hands (three-fourths of Poland’s farmland as well). By the early 1990s, due to an already large presence of the private sector under communism, more than half of the Polish economy was in private hands, while more than four-fifths of Polish shops were privately owned.

  6. Individuals are treated as self-employed if they report that their main source of income comes from a self-employment activity. In an analogous way, we define employees.

  7. This type of model is typically used to model who transitions into self-employment as opposed to remaining in employment (or another state). The main shortcoming of this method is that it omits individuals that are already considered to be in self-employment. For an extensive overview of the literature using these methods see Parker (2009).

  8. As robustness check we estimated models with errors clustered at individual and household level. The results (shown in Table 12 and 13, respectively) remain unchanged.

  9. Households are selected using a two-stage stratified sampling method. Prior to the sampling, households are stratified by region (voivodeship) and by city size (e.g. rural village, small town, large town, etc). The primary sampling units are either statistical regions (for urban strata) or statistical districts (for rural districts).

  10. Additional models have been used to study self-employment such as that by Sarkar et al. (2019), hazard models (e.g. Abbasolu Özgören et al. 2018) or fuzzy set models (e.g. Velilla et al. 2018).

  11. This corresponds to 5925 individuals (3092 male, 2833 female). The distribution of transitions per individual is presented in Table 14.

  12. Both, Carroll (2002) and Charles and Hurst (2003) find that those at the top of the wealth distribution scale are substantially more willing to take risks than those at the bottom.

  13. An alternative specification for those aged 20 to 40 years old confirms the importance of savings for those moving into self-employment. (see Table 10).

  14. A few others studies have used similar methods to ours (see e.g. Tervo and Haapanen 2010 for Finland, Georgellis and Wall 2005 for Germany and Do and Duchene 2008 for Vietnam).

  15. We control for additional macro-level factors in column (4) and column (5) of Tables 4 and 5 that could provide an indication of labor market demand conditions in order to examine their association with the decision to become self-employed. We only find childcare to be statistically significant (positive), and only for men.

  16. At first, stress-related preferences seem counterintuitive given the hassle and uncertainty associated with starting a new business. However, empirical studies present mixed evidence on the relationship between self-employment and work-related stress. For a summary of results, see Hessels et al. (2017)). In fact, these authors show that those working for themselves report lower levels of work-related stress than employees.

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Authors and Affiliations

  1. Department of Labour and Social Policy, Poznan University of Economics and Business, Al. Niepodleglosci 10, Poznan, 61-875, Poland

    Dominik Buttler

  2. LISER, DIW Berlin, IZA and GLO, 11, Porte des Sciences, 4364, Esch-sur-Alzette, Luxembourg

    Eva Sierminska

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  1. Dominik Buttler
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  2. Eva Sierminska
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Appendix

Appendix

Table 7 Sample sizes for moving from other states into self-employment over time for women and men
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Table 8 The classification of work attributes according to the careerist and work-life balance theory
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Table 9 Descriptive statistics of those moving into self-employment and comparison of means between women and men
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Table 10 Determinants of transitioning into self-employment from reduced probit regression for women and men in non-professional occupations (marginal effects)
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Table 11 Determinants of moving into self-employment from reduced probit regression for women and men aged 20 to 40 (marginal effects)
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Table 12 Determinants of moving into self-employment from reduced probit regression for women and men (marginal effects, individual level cluster)
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Table 13 Determinants of moving into self-employment from reduced probit regression for women and men (marginal effects, household level cluster)
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Table 14 Respondents in the final sample by the number of observed transitions
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Buttler, D., Sierminska, E. Career or Flexible Work Arrangements? Gender Differences in Self-employment in a Young Market Economy. J Fam Econ Iss 41, 70–95 (2020). https://doi.org/10.1007/s10834-020-09668-x

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  • DOI: https://doi.org/10.1007/s10834-020-09668-x

Keywords

  • Risk
  • Self-employment
  • Work conditions
  • Gender
  • Poland

JEL Classification

  • D31
  • G11
  • J61
  • J24