Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model

Frank Fossen

No 936, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Why are female entrepreneurs so rare? Women have both to a lower entry rate into selfemployment and a higher exit rate in Germany. To explain the gender gap, a structural microeconometric model of the transition rates is estimated, which includes a standard risk aversion parameter. As inputs into the model, the expected value and variance of earnings from self-employment and dependent employment are estimated separately by gender, accounting for non-random selection into the employment states. The gender differential in the transition rates is decomposed using a novel extension of the Blinder-Oaxaca technique for nonlinear models. Women's higher estimated risk aversion is found to explain the largest part of their higher exit rate, but only a small part of their lower entry rate.

Keywords: Entrepreneurship; self-employment; risk aversion; gender differential; Nonlinear Blinder-Oaxaca Decomposition (search for similar items in EconPapers)
JEL-codes: D81 J16 J23 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2009
New Economics Papers: this item is included in nep-ent
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Related works:
Journal Article: Gender differences in entrepreneurial choice and risk aversion -- a decomposition based on a microeconometric model (2012)
Working Paper: Gender Differences in Entrepreneurial Choice and Risk Aversion - A Decomposition Based on a Microeconometric Model (2011)
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