U.S. Sole Proprietorships: A Gender Comparison, 1985-2000

Abstract

This paper analyzes one of the best sets of small business data - 1985-2000 U.S. sole proprietorship data that Statistics of Income Division, Internal Revenue Service, produces for researchers. It explains the differences in business owners across the nation from 1985 to 2000 by looking into sole proprietorships by gender in general, and by business size, owner's marital status, the ten major business activities, the six broad industries, and the ten most populous states in particular. This paper may shed new light on previous research puzzles such as firm-sensitivities and gender segregations in business activities and earnings, and the possible reason for certain existing gender differences in the business world. The number, and more so for net income, of women businesses grew faster than men during the period. Men's businesses were more firm-size sensitive and disparate than women in business earnings. Gender segregation seemed to be clear when looking into business activities but less so across six broad industries. Florida was the most nurturing state for sole proprietorship growth between 1985 and 2000. A higher proportion of women- than men-sole proprietors bore the responsibility of taking care of their children. Lack of family support is a possible reason female-operated sole proprietorships earned less on average than their counterparts during the same period of time. A set of micro data from SOI, rather than aggregated tabulations, might result in more robust findings.

Keywords: Gender, Sole Proprietorship, Firm, Business, Earning, Marital Status

JEL Classification: L2, M2