Financial literacy and self employment – The moderating effect of gender and race

Elisabeth M. Struckell, Pankaj C. Patel, Divesh Ojha and Pejvak Oghazi

Journal of Business Research, 2022, vol. 139, issue C, 639-653

Abstract: Within the next decade, the number of self-employed workers, now 40% of the workforce, is predicted to surpass that of traditional employees. Managing finances (financial literacy) is an important skill set for self-employment. We bring attention to the growing prevalence of self-employment at a time when financial literacy is in decline in the United States. Using a sample of 15,069 participants in the 2015 and 2018 National Financial Capability Study, we find support for a positive association between financial literacy and self-employment in a U.S. context and extend prior research by focusing on two widely studied and important U.S. demographic segments in self-employment and entrepreneurship literature – gender and race. Contrary to other U.S.-based studies, we find that women with higher financial literacy scores are more likely to be self-employed than men; yet surprisingly, there is no significant difference in the association between higher financial literacy scores and self-employment between non-white and white U.S. respondents. We discuss the implications of the findings for researchers, policymakers, educators, and those considering self-employment.

Keywords: Self-employment; Financial literacy; Race; Gender; Human capital theory (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:139:y:2022:i:c:p:639-653

DOI: 10.1016/j.jbusres.2021.10.003

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