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Businesswomen in Germany and Their Performance by Ethnicity: It Pays to Be Self-Employed

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  • Constant, Amelie F.

    (Temple University)

Abstract

In this paper I assert that the entrepreneurial spirit can also exist in salaried jobs. I 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. Employing data from the German Socioeconomic Panel I estimate selection adjusted wage regressions for both types of businesswomen by country of origin. I find that 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, suggesting that it is the self-employment sector that offers better opportunities and monetary success. Self-employed women in Germany fare well and most importantly, success does not depend on their ethnicity.

Suggested Citation

  • Constant, Amelie F., 2008. "Businesswomen in Germany and Their Performance by Ethnicity: It Pays to Be Self-Employed," IZA Discussion Papers 3644, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3644
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    References listed on IDEAS

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    1. Amelie Constant & Klaus Zimmermann, 2006. "The Making of Entrepreneurs in Germany: Are Native Men and Immigrants Alike?," Small Business Economics, Springer, vol. 26(3), pages 279-300, April.
    2. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-512, March.
    3. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
    4. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
    5. Amelie Constant & Yochanan Shachmurove, 2006. "Entrepreneurial ventures and wage differentials between Germans and immigrants," International Journal of Manpower, Emerald Group Publishing Limited, vol. 27(3), pages 208-229, April.
    6. Magnus Lofstrom, 2002. "Labor market assimilation and the self-employment decision of immigrant entrepreneurs," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 83-114.
    7. Mark P. Taylor, 2001. "Self–Employment and Windfall Gains in Britain: Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 68(272), pages 539-565, November.
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    11. Yannis Georgellis & Howard Wall, 2005. "Gender differences in self-employment," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 321-342.
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    13. Henning Lohmann, 2001. "Self-employed or employee, full-time or part-time? Gender differences in the determinants and conditions for self-employment in Europe and the US," MZES Working Papers 38, MZES.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    immigrants wage differentials; businesswomen; entrepreneurship; self-employment; economics of minorities;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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