IZA DP No. 1234: Immigrant versus Native Businesswomen: Proclivity and Performance
Amelie F. Constant
substantially revised version published in: Kyklos, 2006, 59 (4), 465-480
Career positions in German economic life are still male-dominated, and the driving forces
behind success are not yet well understood. This paper contributes to a better understanding
by classifying success stories in self-employment and business careers, and by investigating
differences between native women (both from West and East Germany) and migrants using a
rich data set from the German Socio-economic Panel. Results on self-employment proclivity
are very sensitive to the alternative choice. Women choose self-employment over a business
career in the salaried sector when they are older, less educated, have under-age children,
and parents who are self-employed themselves. When women are younger and more
educated but have children, they choose self-employment as a way to circumvent
unemployment. Women who are more educated and do not have under-age children are
more likely to be businesswomen in the salaried sector, suggesting a clear choice for a
secure job. East German women are less likely to choose self-employment or a business
career than West German women. Overall, compared to other types of employment, selfemployment
offers women the desirable and valuable element of time and space flexibility.
Businesswomen in paid-employment earn the highest wages and this is long-lasting.
Compared to women in lower dependent employment, those in self-employment earn more.
Thus, self-employment offers women a path to economic success. Invariably, East German
women earn less than West German women.
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