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Female self-employment and children

Abstract

Several analyses report a positive correlation between fertility and female self-employment; however, scholars disagree about the direction of this relationship. Knowing about the causal relationship is important because the relevant mechanisms and possible implications differ tremendously. This paper studies two competing hypotheses: Is self-employment more attractive to women because they have children? Or, is it occupation-specific characteristics of self-employed women that impact their fertility? This work applies a unique approach by utilizing exogenous variation in both children and self-employment.

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Fig. 1

Notes

  1. 1.

    An earlier version of this paper used the self-employment status of parents when the survey respondents were 14 years old as an instrument for the respondents’ self-employment status. As one of the reviewers pointed out, the respondents’ parents who were self-employed may also have had more children, which may influence preferences regarding family size and could make this variable inappropriate as an instrument.

  2. 2.

    The identification strategy applied in this study requires focusing on female labor force participants who have children instead of female labor force participants in general. In contrast to studies in which one wishes to have estimates for a representative sample (e.g. female labor supply), this restriction is less problematic in this case, because the managerial and policy implications resulting from gender related intergroup differences can be driven by a sub-group.

  3. 3.

    The sample used for this study classifies around 2.24 % of all births as twins based on birth in the same year. For the US, the National Vital Statistics Report reports that 1.89 % of all births are twins in 1980, 2.93 % twin births in the year 2000 and 3.26 % in 2008. For 2009, the UK Office of National Statistics reports 1.6 %, and the German Statistical Office reports that 1.7 % of all births are multiple births. Statistics Denmark reported a multiple birth rate of 2.3 % in 2008.

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Acknowledgments

I am grateful to seminar participants at the I&O Seminar in Groningen, as well as two anonymous referees, for many helpful comments.

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Correspondence to Florian Noseleit.

Appendix

Appendix

See Tables 6 and 7.

Table 6 Descriptive statistics
Table 7 OLS and probit results

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Noseleit, F. Female self-employment and children. Small Bus Econ 43, 549–569 (2014). https://doi.org/10.1007/s11187-014-9570-8

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Keywords

  • Self-employment
  • Causality
  • Gender
  • Female entrepreneurship
  • Children

JEL Classifications

  • L26
  • M13
  • J13