What Explains the Gender Earnings Gap in Self-Employment? A Decomposition Analysis with German Data

Daniel S. J. Lechmann () and Claus Schnabel
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Daniel S. J. Lechmann: University of Erlangen-Nuremberg

No 6435, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using a large data set for Germany, we show that both the raw and the unexplained gender earnings gap are higher in self-employment than in paid employment. Applying an Oaxaca-Blinder decomposition, more than a quarter of the difference in monthly self-employment earnings can be traced back to women working fewer hours than men. In contrast variables like family background, working time flexibility and career aspirations do not seem to contribute much to the gender earnings gap, suggesting that self-employed women do not earn less because they are seeking work-family balance rather than profits. Differences in human capital endowments account for another 13 percent of the gap but segregation does not contribute to the gender earnings gap in a robust way.

Keywords: entrepreneurship; earnings differential; self-employed; self-employment; gender pay gap; Germany (search for similar items in EconPapers)
JEL-codes: J31 J71 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2012-03
New Economics Papers: this item is included in nep-ent, nep-eur, nep-lab, nep-lma and nep-ltv
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Citations: View citations in EconPapers (2)

Published - published as 'Why is there a gender earnings gap in self-employment? A decomposition analysis with German data' in: IZA Journal of European Labor Studies, 2012, 1 (6)

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Working Paper: What explains the gender earnings gap in self-employment? A decomposition analysis with German data (2012)
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