Female self‐employment and demand for flexible, nonstandard work schedules

Abstract

Motivated by the rising importance of female self‐employment, this article develops and estimates a two‐step empirical model to explain why married women choose self‐employment over wage‐salary employment. The article also develops a bounded influence regression model to estimate self‐employment wage equations. In sum, a woman is more likely to choose self‐employment the greater her relative earnings potential as self‐employed, the greater her demand for flexibility, the greater her demand for a nonstandard work week, and if her husband has health insurance. The increase in women's earnings potential as self‐employed explains most of the increase in their self‐employment from 1979 to 1990.