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Pushed into necessity? Labor market inequality and entrepreneurship of disadvantaged group

Joanna Tyrowicz () and Magdalena Smyk ()

No 6, GRAPE Working Papers from GRAPE Group for Research in Applied Economics

Abstract: Theoretical literature on entrepreneurship hints that labor market inequality may constitute a relevant push factor for necessity self-employment, as opposed to aspirational self-employment. Drawing on empirical confirmation, this insight is used in many policy recommendations. We provide a new approach to test and quantify the link between labor market inequality and self-employment. We exploit rich and diverse international data on patterns of self-employment from the Global Entrepreneurship Monitor. We focus on measures of labor market inequality for women, utilizing estimates of adjusted gender wage and gender employment gap, comparable for a large selection of countries and years. Our results show that greater gender disparities in access to and in compensation for wage employment are associated with necessity self-employment, but the effect is small. We find no link for the aspirational self-employment.

Keywords: female entrepreneurship; gender wage gap; gender employment gap; GEM (search for similar items in EconPapers)
JEL-codes: J16 L26 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gen
Date: 2017
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