Skip to main content

Advertisement

SpringerLink
Log in

Gender and field of study as determinants of self-employment

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

This article concentrates on gender differences among university graduates with respect to self-employment. We investigate the characteristics of self-employed men and women, focusing in particular on the contribution of field of study as a determinant of the gender gap in self-employment rates. Our approach is based on probit regressions and on the application of a non-linear decomposition technique to the gender gap in self-employment. We find that age and field of study account for two-thirds of the observed gender gap in self-employment.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. For instance, our own calculations indicate that in Austria, almost all university graduates with a degree in agriculture are employed in the agricultural industry; an almost complete overlap can also be found for education as a field of study and the educational sector. Note that the agricultural sector is excluded in the following empirical analysis.

  2. This decision was taken in the course of the peer review process and serves to highlight the role of education choice in the gender gap in SE. In Sect. 6 of the article, in which we present our results, we discuss the sensitivity of our results to the inclusion of information on field of occupation.

  3. The relevance of liquidity constraints may differ greatly among countries and the conclusions reached by Hurst and Lusardi (2002), which are based on U.S. data, might not apply to countries with less developed credit markets.

  4. There are some exceptions: According to Georgellis and Wall (2005), in the period 1984–1997 in Germany, women and men had very similar self-employment rates.

  5. Over the same period (1991–2001), the number of female university graduates in the population increased by 70%; the number of male university graduates increased by 35%.

  6. The data relates to the (working) population aged 15 years and older. In the empirical analysis, we restrict the sample to the working population between the ages of 22 and 64.

  7. Unfortunately, due to data restrictions, we are not able to control for the presence of children in the household.

  8. Here, the agricultural sector is understood to include fishing. It consists of the NACE (Classification of Economic Activities in the European Community) categories 1 through 5. Since the vast majority of unpaid family workers can be found in the agricultural sector, there are only 986 unpaid family workers left in our sample (corresponding to 0.27% of the total). Hence, our results are not sensitive to the inclusion of this group.

  9. The classification of the regional districts is based on factors like capital intensity, population density, and sectoral employment concentration. For a detailed description of the methodology, see Palme (1995).

  10. In 2006, 75% of Austrian children below the age of 15 were living in households with married couples; such households represented a share of 49% of all households.

  11. The effect is calculated as CDF(0.062 * age + (−0.005) * age * age + constant). For women, the effect is: CDF(0.008 * age + (0.0001) * age * age + constant).

  12. Not surprisingly, for both men and women the probability of SE is highest in business services, wholesale and retail trade and hotels and restaurants. We find that the probability is lowest in public administration, education, and manufacturing. Detailed results are available upon request.

  13. We use the Stata program implemented by Jann (2006).

  14. Younger women make education choices that by themselves should not lead to SE rates different from those of their male counterparts.

References

  • Blanchflower, D., & Oswald, A. (1998). What makes an entrepreneur? Journal of Labor Economics, 16(1), 26–60.

    Article  Google Scholar 

  • Borghans, L., & Groot, L. (1999). Educational presorting and occupational segregation. Labour Economics, 6(3), 375–395.

    Article  Google Scholar 

  • Borjas, G. (1986). The self-employment experience of immigrants. NBER working papers 1942, National Bureau of Economic Research.

  • Brown, S., Farrel, L., & Sessions, J. (2006). Self-employment matching: An analysis of dual earner couples and working households. Small Business Economics, 26, 155–172.

    Article  Google Scholar 

  • Burke, A. E., Fitzroy, F. R., & Nolan, M. A. (2002). Self-employment, wealth and job creation: The roles of gender, non-pecuniary motivations and entrepreneurial ability. Small Business Economics, 19, 255–270.

    Article  Google Scholar 

  • Charles, M., & Bradley, K. (2002). Equal but separate? A cross-national study of sex segregation in higher education. American Sociological Review, 67, 573–599.

    Article  Google Scholar 

  • Clark, K., & Drinkwater, S. (2002). Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales. Journal of Population Economics, 15(1), 5–29.

    Article  Google Scholar 

  • Cowling, M., & Taylor, M. (2001). Entrepreneurial women and men: Two different species? Small Business Economics, 16(3), 167–175.

    Article  Google Scholar 

  • Delmar, F., & Davidsson, P. (2000). Where do they come from? Prevalence and characteristics of nascent entrepreneurs. Entrepreneurship & Regional Development, 12, 1–23.

    Article  Google Scholar 

  • Dunn, T., & Holtz-Eakin, D. (2000). Financial capital, human capital, and the transition to self-employment: Evidence from intergenerational links. Journal of Labor Economics, 18(2), 282–305.

    Article  Google Scholar 

  • Evans, D. S., & Leighton, L. S. (1989). Some empirical aspects of entrepreneurship. American Economic Review, 79(3), 519–535.

    Google Scholar 

  • Fairlie, R. (1999). The absence of the African-American owned business: An analysis of the dynamics of self-employment. Journal of Labor Economics, 17(1), 80–108.

    Article  Google Scholar 

  • Fairlie, R. (2005). An extension of the Blinder-Oaxaca decomposition technique to logit and probit models. Journal of Economic and Social Measurement, 30, 305–316.

    Google Scholar 

  • Edwards, L. N., & Field-Hendrey, E. (2002). Home-based work and women’s labor force decisions. Journal of Labor Economics, 20(1), 170–200.

    Article  Google Scholar 

  • Fonseca, R., Lopez-Garcia, P., & Pissarides, C. (2001). Entrepreneurship, start-up costs and employment. European Economic Review, 45(4–6), 692–705.

    Google Scholar 

  • Fujii, E., & Hawley, C. (1991). Empirical aspects of self-employment. Economic Letters, 36, 323–329.

    Article  Google Scholar 

  • Georgellis, Y., & Wall, H. J. (2005). Gender differences in self-employment. International Review of Applied Economics, 19(3), 321–342.

    Article  Google Scholar 

  • Holtz-Eakin, D., Joulfaian, D., & Rosen, H. S. (1994). Entrepreneurial decisions and liquidity constraints. Rand Journal of Economics, 25, 334–347.

    Article  Google Scholar 

  • Hughes, K. D. (2006). Exploring motivation and success among Canadian women entrepreneurs. Journal of Small Business and Entrepreneurship, 19(2), 107–120.

    Google Scholar 

  • Hundley, G. (2001). Why women earn less than men in self-employment. Journal of Labor Research, 22(4), 817–29.

    Article  Google Scholar 

  • Hurst, E., & Lusardi, A. (2002). Liquidity constraints, household wealth and entrepreneurship. Journal of Political Economy, 112, 319–347.

    Article  Google Scholar 

  • Jacobs, J. A. (1996). Gender inequality and higher education. Annual Review of Sociology, 22, 153–185.

    Article  Google Scholar 

  • Jann, B. (2006). Fairlie—-nonlinear decomposition of binary outcome differentials. Software module available in Stata.

  • Lazear, E. P. (2005). Entrepreneurship. Journal of Labor Economics, 23(4), 649–80.

    Article  Google Scholar 

  • Le, A. T. (1999). Empirical Studies of self-employment. Journal of Economic Surveys, 13(4), 381–416.

    Article  Google Scholar 

  • Lofstrom, M. (2002). Labor market assimilation and the self-employment decision of immigrant entrepreneurs. Journal of Population Economics, 15(1), 83–114.

    Article  Google Scholar 

  • Lombard, K. (2001). Female self-employment and demand for flexible, nonstandard work schedules. Economic Inquiry, 39(2), 214–237.

    Article  Google Scholar 

  • Luber, S., Lohnmann, H., Müller, W., & Barbiere, P. (2000). Male self-employment in four European countries. International Journal of Sociology, 30, 5–44.

    Google Scholar 

  • Martinez-Granado, M. (2002). Self-employment and labour market transitions: A multiple state model. C.E.P.R. discussion papers, p. 3661.

  • OECD (2004). Education at a Glance 2004. Paris: OECD.

  • Palme, G. (1995). Struktur und Entwicklung österreichischer Wirtschaftsregionen, Mitteilungen der Österreichischen Geographischen Gesellschaft. Wien, 137, 393–416.

    Google Scholar 

  • Parker, S. (2007). Entrepreneurship among married couples in the United States: A simultaneous probit approach. Labour Economics. doi:10.1016/j.labeco.2007.03.004.

    Google Scholar 

  • Parker, S., & Robson, M. T. (2004). Explaining international variations in self-employment: Evidence from a panel of OECD countries. Southern Economic Journal, 71, 287–301.

    Article  Google Scholar 

  • Rees, H., & Shah, A. (1986). An empirical analysis of self-employment in the U.K. Journal of Applied Econometrics, 1(1), 95–108.

    Article  Google Scholar 

  • Robinson, P., & Sexton, E. A. (1994). The effect of education and experience on self-employment success. Journal of Business Venturing, 9, 141–156.

    Article  Google Scholar 

  • Rosti, L., & Chelli, F. (2005). Gender discrimination, entrepreneurial talent and self-employment. Small Business Economics, 24, 131–242.

    Article  Google Scholar 

  • Storey, D. (1994). Understanding the small business sector. London: Routledge.

    Google Scholar 

  • Taniguchi, H. (2002). Determinants of women’s entry into self-employment. Social Science Quarterly, 83(3), 875–893.

    Article  Google Scholar 

  • Taylor, M. P. (1996). Earnings, independence or unemployment: Why become self-employed? Oxford Bulletin of Economics and Statistics, 58(2), 253–266.

    Google Scholar 

  • Torrini, R. (2005). Cross-country differences in self-employment rates: The role of institutions. Labour Economics, 12, 661–683.

    Article  Google Scholar 

  • Wellington, A. J. (2006). Self-employment: The new solution for balancing family and career? Labour Economics, 13, 357–386.

    Article  Google Scholar 

  • Yuengert, A. M. (1995). Testing hypotheses of immigrant self-employment. Journal of Human Resources, 30(1), 194–204.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Austrian Institute of Economic Research (WIFO), Vienna, Austria

    Thomas Leoni & Martin Falk

Authors
  1. Thomas Leoni
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Martin Falk
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Thomas Leoni.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Leoni, T., Falk, M. Gender and field of study as determinants of self-employment. Small Bus Econ 34, 167–185 (2010). https://doi.org/10.1007/s11187-008-9114-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-008-9114-1

Keywords

JEL classifications

Search

Navigation