Human Capital and Women's Business Ownership
Women entrepreneurs are among the fastest growing groups of business owners. The number of women starting and
owning businesses increased dramatically over the last few decades. Furthermore, the types of businesses women
tend to own are changing. An explanation for why women have emerged as an important entrepreneurial group and
why they have moved beyond traditional sectors can be found in examinations of changes in women's human
capital-especially their educational attainment and occupational representation.
Highlights
Self-employed women differ from wage and salary-earning women on most of the human capital variables that
were examined; however, there is no strong association between such factors as age, current earnings, education,
income diversity and self-employment among women.
There is a strong association between 1) holding a managerial occupation and 2) industry sector
participation and self-employment among women.
Contrary to expectations, neither wage and salary-earning nor self-employed women significantly shifted
industry participation over this portion of the study period. However, wage and salary-earning women were somewhat
more likely than self-employed women to be in industries with the greatest degree of female ownership (primarily
social services and education services). Self-employed women were more likely to be in industries with a medium
presence of female ownership. This suggests, according to the authors, that self-employed women were branching
out of industries traditionally associated with women.
More self-employed men hold an advanced degree compared to self-employed women over the study period, but
the gap narrowed considerably by 2006.
Self-employed minorities were slightly more likely than self-employed whites to have a college degree
throughout much of the study period. By 2006, the percentage of all self-employed groups by race and gender having
a college degree were clustered around 22 to 23 percent.
Earnings data show that the self-employed were most likely to be either in the first (lowest) or fourth
(highest) quartile.
High percentages of the self-employed were in the 40-49 and 50-59 age groups.
Darrene Hackler, Ellen Harpel and Heike Mayer, Business Development Advisors, Arlington, VA 22201
April 2008
