Trends in Women’s Self-Employment Participation, 1940-1990

Michelle Budig, University of Massachusetts

After a long decline, non-agricultural self-employment has experienced a renaissance since the 1970s in the Western industrialized world. Women's participation in self-employment has risen dramatically, and at a pace that outstrips their increasing participation in the regular employment labor market. Although many policy makers and researchers view this growth in self-employment as a marker of women's progress toward economic equity, new evidence suggests that the growth in self-employment is not a boon for all involved. Researchers have begun to investigate the growing polarization among the self-employed into "good" jobs and "bad" jobs -- where "good" jobs are marked by belonging to higher paying occupations and industries. Research has also started to explore sex differences in self-employment and the influence of the family on self-employment. The question that has not been addressed in the literature is to what extent is the growing polarization of self-employed individuals is aligned with gender and family status differences among the self-employed. The contribution of this paper is that it examines the gendered and familial character of women's self-employment across time. The purpose of this paper is twofold: 1) to examine general trends in women’s self-employment in the United States during the second half of the twentieth century and 2) to describe the gendered patterns within this form of work, compared with traditional employment. Specifically, I ask, how has the prevalence of self-employment in the US changed since the 1940’s and to what extent do women differ from men? What is the character of the work available in self-employment (e.g., occupations and industries) for women? And, most importantly, what role do family factors play in women's choices of self-employment and regular employment? Gender, Family, and Self-Employment I propose two theories that take women’s structural positions in the family and in the economy into account. The first I call the Work and Family Conflict theory of women’s self-employment, the second I term the Glass Ceiling Breakers theory. The first theory relates to the ability of mothers to balance work and family responsibilities and is an institutional argument. Parent-friendly jobs have not become institutionalized despite increases in women's employment. For women, the lack of childcare, inadequate wages, and restricted or nonstandard working schedules, means that mothers of young children have a difficult time, either being hired or finding a job that allows them to handle their family responsibilities. Presser (1995) argued that nonstandard work schedules (defined as rotating shifts, evenings, nights, and weekends) may be more compatible with child-rearing than regular 9 to 5 hours because parents can work different shifts and “trade off” on childcare duties. Presser’s findings suggest that women with young children may turn to self-employment to make work more compatible with child responsibilities. Connelly (1992) also argues that mothers, especially mothers of young children, are more likely to be self-employed and that self-employment is more friendly for child-rearing than is wage employment. If the above arguments are true, I expect to see a disproportionate share of mothers in self-employment relative to mothers in wage employment due to the institutional constraints mothers face in wage work. The second theory is that of the glass ceiling breakers. It is well documented that women face discrimination in the workplace (England 1992; Reskin and Roos 1990). Research shows that men and women are not treated equally at work, even when they have the same job qualifications and are hired to perform the same job. The concept of the glass ceiling describes the seemingly invisible barrier that women encounter when they try to enter the most lucrative and prestigious positions in their specialty. If the source of discrimination is the employer, then a work situation where a woman is her own boss would eliminate this type of discrimination. Therefore, self-employment could provide high achieving women with a means of breaking through the glass ceiling. If women are using self-employment to circumvent discrimination in the paid labor market, how would we identify them? The implicit assumption is that these women would be “high-fliers,” or high-achieving women frustrated by discrimination. Thus, I expect glass-ceiling breakers to be disproportionately highly educated and working long hours. In addition, I expect that this story will best apply to women in professional self-employment. Data and Methods To provide an historical examination of the story of women's self-employment participation, I use a sample of census data from each of the 1940-1990 censuses. The data were provided through Integrated Public Use Microdata Series (IPUMS): census data for social and economic research. These data were compiled by Ruggles and Sobeck at the University of Minnesota in 1997. The IPUMS consists of twenty-five high-precision samples of the American population drawn from thirteen federal censuses. The variable indicating self-employment was not measured every decade in the IPUMS data until 1940. Consequently, the data used in this paper cover 1940-1990. Everyone aged 14 and over in 1940-1970 and everyone aged 16 and over in 1980 and 1990 were included in the sample. However, for my analyses, I deleted respondents younger than 18 years and older than 65 years. I also excluded farm households from my sample. Descriptive data analysis methods will be used to summarize women's employment participation from 1940-1990. Tables, figures, and graphs will be presented. Women's self-employment participation will be analyzed by age, parenthood status, marital status, education, hours worked, professional status, occupation, and industry. Self-employment characteristics will be compared with regular employment characteristics. Comparisons will be made with men where relevant. Preliminary Discussion of Results The two gendered theories that try to explain women's self-employment help account for women's self-employment, but apply to different groups of women. According to the Glass Ceiling Breakers theory, high-achieving women enter self-employment to escape the glass ceiling they encounter as employees. These women are likely to be professionals who would work long hours. As the evidence shows, this profile fits one group of self-employed women: childless professionals. This particular group is exceptional in the number of hours they work (over-time is the modal category) compared to regularly employed professional women and compared to non-professional mothers in both regular and self-employment. Self-employed professionals with children in the home show a slight tendency to be using self-employment as a means to balance work and family, but this tendency is not strong. The work and family conflict theory suggests mothers will use self-employment to reconcile family and work responsibilities. This theory best fits the self-employed mothers in the non-professional occupations. Fully half of these mothers work only part-time. Many work in jobs such as childcare and hairdressing; these jobs would be easy to blend with caring for one’s own children. Clearly, self-employed women are a heterogeneous group. Unlike men, for whom family status has no effect on self-employment participation, family is central to many self-employed women’s work. Future research on women's self-employment should distinguish not only between professionals and non-professionals, but among women with and without children. What about the growing polarization of bad jobs and good jobs in self-employment? Are these jobs dividing along gendered lines? The largest distinction by sex in job type is seen at the non-professional level of self-employment. In this category, men appear to have better jobs. They most frequently report working as skilled craftsmen or tradesmen -- as plumbers, carpenters, or auto mechanics. These are well paying occupations. Non-professional women who are self-employed are most frequently working in personal services -- as hairdressers, childcare workers, or personal care attendants. These occupations are notoriously at the bottom of the pay scales (England 1992). Thus, within the non-professional category, the polarization of good jobs and bad jobs seems to align with sex differences -- with the result being that women are worse off in labor market position. The sex difference is not the only pattern that aligns with good and bad jobs -- among women motherhood greatly affects job type and work patterns. Mothers are much more likely to be in self-employment, and in particular, part-time non-professional self-employment. These jobs would be expected to have the lowest pay. However, they may not necessarily be considered "bad jobs" by their occupants. It is in non-professional self-employment that mothers work the fewest hours. Not only are they working the least hours of all men and women in the labor market, but the types of jobs performed by women in this category may be the most conducive to balancing work and family demands. These jobs include child care worker, personal attendant, and hairdressing. Being able to take others' children into their home for day care, or run a beauty shop out of the basement, both allow mothers to stay at home and be available to their children. Similarly, running errands or caring for an adult could also allow mothers to bring their children with them to work. While I cannot tell from these data whether mothers are choosing these work arrangements for their compensating differentials and mother-friendliness, this is a researchable hypothesis. Future research should examine the factors behind women's entrance into self-employment to understand the decision-making process more clearly.