Gender Differences in Self-employment Duration: the Case of Opportunity and Necessity Entrepreneurs

Adela Luque and Maggie R. Jones

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: A strand of the self-employment literature suggests that those “pushed” into self-employment out of necessity may perform differently from those “pulled” into self-employment to pursue a business opportunity. While findings on self-employment outcomes by self-employed type are not unanimous, there is mounting evidence that performance outcomes differ between these two self-employed types. Another strand of the literature has found important gender differences in self-employment entry rates, motivations for entry, and outcomes. Using a unique set of data that links the American Community Survey to administrative data from Form 1040 and W-2 records, we bring together these two strands of the literature. We explore whether there are gender differences in self-employment duration of self-employed types. In particular, we examine the likelihood of self-employment exit towards unemployment versus the wage sector for five consecutive entry cohorts, including two cohorts who entered self-employment during the Great Recession. Severely limited labor-market opportunities may have driven many in the recession cohorts to enter self-employment, while those entering self-employment during the boom may have been pursuing opportunities under favorable market conditions. To more explicitly test the concept of “necessity” versus “opportunity” self-employment, we also examine the wage labor attachment (or weeks worked in the wage sector) in the year prior to becoming self-employed. We find that, within the cohorts we examine, there are gender differences in the rate at which men and women depart self-employment for either wage work or non-participation, but that the patterns are dependent on pre self-employment wage-sector attachment and cohort effects.

Keywords: Self-employment; gender differences; gender; entrepreneurship; necessity entrepreneur; opportunity entrepreneur; self-employment duration; Great Recession. (search for similar items in EconPapers)
JEL-codes: J15 J20 J24 L26 M13 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2019-09
New Economics Papers: this item is included in nep-ent, nep-gen, nep-lma and nep-sbm
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https://www2.census.gov/ces/wp/2019/CES-WP-19-24.pdf First version, 2019 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:19-24

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