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What's the Difference?! Gender, Personality, and the Propensity to Start a Business

43 Pages Posted: 1 Mar 2010  

Marina Dimitrova Furdas

University of Freiburg

Karsten Kohn

Kreditanstalt für Wiederaufbau (KfW), KfW Development Bank; IZA Institute of Labor Economics

Abstract

Women start fewer businesses than men. The start-up rate among women in Germany falls short of males' start-up rate by one third. We scrutinize this gender gap using individual-level data from the KfW Start-up Monitor, a large-scale population survey on start-up activity in Germany. As a unique feature, the data combine socio-demographic characteristics, entrepreneurship-related attitudes, and general personality traits of both business starters and non-starters. Estimating binary choice models and employing decomposition techniques, we find that gender differences in socio-demographics alone would even be in favor of higher start-up rates among women, while the distribution of personality traits is less favorable for business start-ups among women and explains about one third of the entire gender difference. Most substantially, men opt for a start-up more often even given identical human capital and related endowments. Qualificational policies targeted towards higher educational attainments of potential entrepreneurs do thus not suffice to increase the number of female business starters.

Keywords: entrepreneurship, gender difference, start-up propensity, decomposition analysis, KfW Start-up Monitor, Germany

JEL Classification: J16, L26, M13

Suggested Citation

Furdas, Marina Dimitrova and Kohn, Karsten, What's the Difference?! Gender, Personality, and the Propensity to Start a Business. IZA Discussion Paper No. 4778. Available at SSRN: https://ssrn.com/abstract=1560905

Marina Furdas (Contact Author)

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

Karsten Kohn

Kreditanstalt für Wiederaufbau (KfW), KfW Development Bank ( email )

Palmengartenstr. 5-9
Frankfurt, 60325
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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