Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey

September 2008

Robert W. Fairlie, University of California, Santa Cruz; Alicia M. Robb, University of California, Santa Cruz

Download 'working_paper08-13.pdf'.

Abstract

Using confidential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and financial capital play in contributing to why female-owned businesses have lower survival rates, profits, employment and sales. We find that female-owned businesses are less successful than male-owned businesses because they have less startup capital, and business human capital acquired through prior work experience in a similar business and prior work experience in family business. We also find some evidence that female-owned businesses work fewer hours and may have different preferences for the goals of their business.

Keywords:
Discrimination, Employment, Unemployment, and the Labor Market