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Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model

Referierte Aufsätze Web of Science

Frank M. Fossen

In: Applied Economics 44 (2012), 14, S. 1795-1812

Abstract

Why are female entrepreneurs so rare? In Germany, women exhibit both a lower entry rate into and higher exit rate from self-employment. To explain this gender gap, this study estimates a structural microeconometric model of transition rates that includes a standard risk aversion parameter. Inputs into the model are the expected value and variance of earnings from self-employment and dependent employment, estimated separately by gender and accounting for nonrandom selection into self-employment. The gender differential in the transition rates is decomposed using a novel extension of the Blinder-Oaxaca technique for nonlinear models. Women's higher estimated risk aversion explains the largest part of their higher exit rate but only a small portion of their lower entry rate.



JEL-Classification: J23;J16;D81
Keywords: entrepreneurship, self-employment, risk aversion, gender differential, nonlinear Blinder-Oaxaca decomposition
DOI:
http://dx.doi.org/10.1080/00036846.2011.554377

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