Gender Discrimination and Self-Employment Dynamics in Europe

This paper examines the effect that gender-based earnings discrimination has on self-employment dynamics among females, with a focus on four countries in Western Europe. Using data from the European Community Household Panel in the 1999-2001 time period, we test the hypothesis that the probability of moving into self-employment is positively related to prior earnings discrimination, as measured by unexplained deviations from expected (male) earnings. Our findings suggest that women who have lower than expected wage sector earnings relative to other women are more likely to leave wage employment in the following year. The results with respect to discrimination, however, are mixed.