Gender and Entrepreneurship: Empirical Analysis Using the German Socio-Economic Panel (SOEP)

Abstract

This study investigates the gender disparity in entrepreneurship in Germany. Using the data from the Socio-Economic Panel (SOEP), levels of education, Risk tolerance, and parental role model have a positive significant influence on the probability of Women’s Self-employment. I find no evidence that the higher educational level plays a role in Men’s probability of self-employment. Also, there is a higher probability of self-employment activity in East Germany than in West Germany. In West Germany, strong evidence prevails that both self-employed father and mother has a positive influence on Women’s probability of self-employed but not for men. Yet, in East Germany, only self-employed mother's has a significant influence on women.

Non-linear Blinder-Oaxaca decomposition technique revealed that Women have a less probability of self-employment than Men. On average more than one-third of the gender difference driven from risk aversion behavior of women.

Keywords: Entrepreneurship, Gender, education, risk attitude, German Socio-Economic Panel, Probit, non-linear Blinder-Oaxaca decomposition