Academic journal article The American Journal of Economics and Sociology

Flexible Working Hours, Family Responsibilities, and Female Self-Employment: Gender Differences in Self-Employment Selection

Academic journal article The American Journal of Economics and Sociology

Flexible Working Hours, Family Responsibilities, and Female Self-Employment: Gender Differences in Self-Employment Selection

Article excerpt

I

Introduction

Over the last two decades, there has been especially strong growth in the number of self-employed women in the United States, as well as the proportion of working women who are self-employed. Specifically, Devine (1994) reports that, between 1975 and 1990, the number of self-employed women more than doubled, rising from 1.7 million in 1975 to 4 million in 1990. Devine further notes that the proportion of working women who were classified as self-employed rose by 63 percent over the same time period. Indeed, female self-employment has become a phenomenon important enough to merit further empirical inquiry.

Two recent studies have suggested that there are some basic differences in the reasons why men and women opt for self-employment. Carr (1996) uses 1980 U.S. Census of the Population data to analyze gender differences in the probability that individuals are self-employed (in cross-section). Carr notes that women's employment decisions are often tied to family considerations, and she hypothesized that some women seek self-employment to avail themselves of flexible working hours. Using logistic regression, Carr finds that having children, particularly young children, has a differentially strong, positive impact on women's tendency to be self-employed. She considered this finding to be consistent with her central hypothesis that some women pursue self-employment for flexibility of working hours in order to accommodate family-related obligations. Using longitudinally matched Current Population Survey data for reference years 1987-1992, Boden (1996) examines gender differences in the probability of switching from wage employment in one year to self-employment in the next year, conditional upon base-year worker and job characteristics. Among other things, Boden finds a positive and significant impact of having young children on women's propensity to enter self-employment, while for men, the effect of having young children was weaker and not as statistically significant. Boden, like Carr, attributes the differential impact of having young children as a manifestation of women's pursuit of self-employment for flexibility of working hours.

In this study, we draw upon a unique, recent source of data to corroborate the findings of Boden and Carr. We proceed to present direct evidence of notable gender differences in the reasons why individuals choose to become self-employed, as well as differences in how having young children affects men's and women's reasons for becoming self-employed.

II

Data and Research Sample Description

The data used to support this study were drawn from the Contingent Work Survey (CWS), a special supplement to the February 1995 Current Population Survey (CPS). The CPS is a monthly survey (conducted by the U.S. Bureau of the Census) of roughly 60,000 households and over 100,000 household members. The February 1995 CPS contained a supplemental set of questions designed to produce estimates of the size of the contingent workforce - i.e., individuals employed in positions that they perceive to be temporary or transitional. As a by-product, this supplement collected data for self-employed workers on some unique variables, including self-employment tenure, the reasons why individuals chose to become self-employed, and how much longer they expected to be self-employed.

The research sample at the focus of this study is comprised of white, non-Hispanic men and women who are either self-employed or employed as wage workers in nonagricultural industries. (Private household workers and members of the armed forces are also excluded from the research sample.) The restriction to white, non-Hispanic men and women was made in order to reduce heterogeneity in unobserved or unmeasured worker characteristics. These characteristics include total years of work experience, which varies by race and is not captured by the Contingent Work Survey. …

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