Social Capital and the Willingness to Become Self-Employed: Is There a Difference between Women and Men?
34 Pages Posted: 31 Mar 2006
Date Written: March 2006
Abstract
This article studies the role of social capital in the occupational choice process involving whether to become self-employed or not. Although the decision to become self-employed has itself been analyzed frequently, social capital as an important explanatory variable has often been neglected. We show that the willingness to become self-employed depends quite strongly on a person's social capital. Furthermore, we are able to show for the first time that since women invest differently in social capital than men, this factor helps to explain gender differences in the willingness to become self-employed. We test our hypotheses with two ordered probit estimates using a data set with 5,000 students. Firstly, we find that the more social capital individuals hold, the more willing they are to start their own business. Secondly, we observe that women invest differently and on a smaller scale in social capital than men and are therefore less willing to become self-employed. This helps to explain why the entrepreneurship rate of women is still substantially lower than that of men and underlines the importance of fostering the inclusion of women in networking activities and other events generating social capital.
Keywords: Social Capital, Entrepreneurship, Gender Differences
JEL Classification: M13, M19, M21
Suggested Citation: Suggested Citation
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