Do Job Preferences Add to the Explanation of the Gender Earnings Gap in Self-Employment? The Case of St. Croix County, Wisconsin

Abstract

This study uses data collected on self-employed women and men in a singlecounty to analyze the influence of job preferences on the gender-based earnings gap. Datareduction, carried out on the pooled sample, reduces eleven job preference measuresselected for the study to five: challenge of competition, make a lot of money, job security,close to extended family, and can be innovative. A separate regression for self-employedwomen indicates make a lot of money has a positive and close to extended family anegative effect on earnings. For self-employed men, results indicate positive effects onearnings for challenge of competition and make a lot of money. Sensitivity resultsindicate, in estimates for self-employed women, the positive effect of make a lot of moneyis not robust. At the same time, the sensitivity analysis indicates a positive effect ofpreference for financial risk-taker on the earnings of self-employed women. A Oaxacadecomposition using pooled, female, and male coefficients indicates the strongerpreference of self-employed men in the sample towards make a lot of money explains atleast 6.37 percent of the earnings gap. (J01, J13, J16, J22)