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Businesswomen in Germany and their performance by ethnicity

Author

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  • Amelie F. Constant

Abstract

Purpose - The purpose of this paper is to study the determinants of wages and the labor market success of two kinds of entrepreneurial women in Germany: self‐employed and salaried businesswomen, and investigate whether ethnicity is important in these challenging jobs. Design/methodology/approach - Using Lee's technique, the paper first estimates the probabilities of being in self‐employment, a salaried businesswoman, working in other non‐entrepreneurial jobs, and not working at all with a multinomial logit, and accordingly adjust the wage regressions for selection and heteroscedasticity. By employing data from the German Socio‐economic Panel one can differentiate among different types of self‐employment and business entrepreneurship, control for human capital and labor market structures, and estimate wages for native and immigrant women aged 20 to 65. The subject scope includes literature on entrepreneurship, self‐employment, gender‐edge, and immigrant earnings assimilation. Findings - Self‐employment offers businesswomen a lucrative avenue with higher monetary rewards, albeit for a shorter spell. If salaried businesswomen went into self‐employment, they would receive considerably higher wages and for at least 30 years. However, if self‐employed businesswomen went into salaried jobs, their wages would decline. This suggests that it is the self‐employment sector that offers better opportunities and monetary success, but not many businesswomen go into it. In these two entrepreneurial outlets human capital, years‐since‐migration and ethnicity are not significant. Research limitations/implications - Future research should overcome the cross‐sectional limitation and take advantage of the panel aspect. Practical implications - Many qualified, highly educated and talented women are not part of the labor market and the entrepreneurial world. Germany should encourage these women to work, as it needs skilled workers and a stronger entrepreneurial sector. Financial disparities still exist between West and East Germany. Originality/value - The novelty comes from asserting that the entrepreneurial spirit can also exist in salaried jobs. The added value is the new empirical evidence on the importance of self‐employment in Germany, where women fare well and success does not depend on ethnicity.

Suggested Citation

  • Amelie F. Constant, 2009. "Businesswomen in Germany and their performance by ethnicity," International Journal of Manpower, Emerald Group Publishing Limited, vol. 30(1/2), pages 145-162, March.
    • Handle: RePEc:eme:ijmpps:v:30:y:2009:i:1/2:p:145-162
    DOI: 10.1108/01437720910948456
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    Citations

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    Cited by:

    1. Jan Brzozowski & Anke Lasek, 2019. "The impact of self-employment on the economic integration of immigrants: Evidence from Germany," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 15(2), pages 11-28.
    2. Karen Leppel, 2016. "The incidence of self-employment by sexual orientation," Small Business Economics, Springer, vol. 46(3), pages 347-363, March.
    3. Szennay, Áron & Radácsi, László & Timár, Gigi, 2021. "Szabadúszók Magyarországon. Egy új kutatási program elméleti háttere és első empirikus eredményei [Freelancers in Hungary: the theoretical background and initial empirical results of a new research," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(S11), pages 78-106.
    4. Chreim, Samia & Spence, Martine & Crick, David & Liao, Xiaolu, 2018. "Review of female immigrant entrepreneurship research: Past findings, gaps and ways forward," European Management Journal, Elsevier, vol. 36(2), pages 210-222.
    5. Korpi, Martin & Hedberg, Charlotta & Pettersson, Katarina, 2013. "Immigrant Women and Entrepreneurship: A Study of the Health Care Sector in Sweden, 2002-2006," SULCIS Working Papers 2013:3, Stockholm University, Linnaeus Center for Integration Studies - SULCIS.
    6. Daniel S. J. Lechmann, 2015. "Can working conditions explain the return-to-entrepreneurship puzzle? [Können Arbeitsbedingungen das „return-to-entrepreneurship puzzle“ erklären?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(4), pages 271-286, December.
    7. Constant, Amelie F. & Tien, Bienvenue N., 2011. "Germany's Immigration Policy and Labor Shortages," IZA Research Reports 41, Institute of Labor Economics (IZA).

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