Explaining preferences and actual involvement in self-employment: Gender and the entrepreneurial personality

This paper investigates an essential aspect of the entrepreneurial personality: why women’s self-employment rates are consistently lower than those of men. It has three focal points. It discriminates between the preference for self-employment and actual involvement in self-employment using a two (probit) equation model. It makes a systematic distinction between different ways in which gender influences the preference for and actual involvement in self-employment (mediation and moderation). It includes perceived ability as a potential driver of self-employment next to risk attitude, self-employed parents and other socio-demographic drivers. A representative data set of more than 8000 individuals from 29 countries (25 EU Member States, US, Norway, Iceland and Liechtenstein) is used (the 2004 Flash Eurobarometer survey). The findings show that women’s lower preference for becoming self-employed plays an important role in explaining their lower involvement in self-employment and that a gender effect remains that may point at gender-based obstacles to entrepreneurship.

► We investigate why women’s self-employment rates are consistently lower than those of men.
► A distinction is made between the preference for self-employment and actual involvement in self-employment.
► We test for mediation and moderation effects using a representative dataset covering more than 8000 individuals from 29 countries.
► Women’s low self-employment rates are largely explained by a lack of willingness to become self-employed.
► The remaining gender effect may point at the existence of gender-based obstacles.