Gender Discrimination, Entrepreneurial Talent and Self-Employment

Abstract

The trend of female self-employment in Italy is stable, with a low level of participation which confirms the prediction of economic theory on discrimination. We contend that gender discrimination alters the distribution of entrepreneurial talent between employees and self-employed workers. This gives rise to the prediction that the self-employed women are less likely to survive when self-employed than men because the lesser entrepreneurial talent of women will increase their risk of failure. Applying Markovian analysis to ISTAT’s labor market transition matrices we verify this prediction: Many women try to set up on their own, but they fail to remain self-employed both because their lesser entrepreneurial talent and because they try to become entrepreneurs without any previous experience of work. ‘If you think you’re so discriminated against, why don’t you set up on your own?’