Women Like the Self-Employment Lifestyle, Earnings Motivate Men

While data repeatedly show that entrepreneurs have a key role in spurring economic growth through innovation and job creation, there's still a bevy of questions around the reasons driving men and women to take the small business plunge.

A new study (pdf) released from the Small Business Administration's Office of Advocacy finds that women base their decisions on lifestyle and family factors while men are motivated by earnings' potential.

While that may come as no great surprise, it's interesting that although self-employed women spend more time with their children and families, according to the study, self-employed rates for women remain about half of those for men. "Self-Employed Women and Time Use" shows that women are about 57 percent less likely than men to enter self-employment. Entry rates are lowest among African-American and foreign-born women in comparison to their male counterparts.

The study's authors examined time-use patterns to look at the differences between self-employed women and other individuals because little is known about how self-employed women divide their time between work and other life activities.

Highlights:

* Self-employed women spend about 3.5 more hours in household activities per week than women employed in wage-and-salary work and 6 more hours than men;

* Contrary to results in previous studies, higher earning women were slightly more likely to enter self-employment than their lower earning peers;

* Women with more advanced degrees are more likely to enter self-employment, especially in the finance, education and health sectors and other service categories;

* Self-employed women work about 1.5 hours less per day in their self-employment work or about 10 fewer hours per week than self-employed men; and

* Women work as wage-and-salary employees about 6 fewer hours per week than wage-and-salary-employed men.

The authors say the differences in motivating factors to become entrepreneurs could indicate the need for policies encouraging the self-employment of women in general, and particularly target innovative, high-earning women. Policies encouraging better work-family management strategies may make self-employment more attractive for lifestyle reasons, but do little to address earnings or risk deterrents, which might be greatest for high-earning or innovative women. Other policies, such as those that reduce risk such as affordable health insurance, provide loans to ease liquidity constraints or use education/information campaigns, might be better for attracting higher-earning women into self-employment and stimulating economic growth, they say.

By Sharon McLoone |  March 4, 2009; 3:00 PM ET Data Points
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