Women's Economic Niches and Earnings Inferiority: The View from the Ethnic Economy

Abstract

Approaching women's economic niches and earnings inferiority from the point of view of the ethnic economy literature, this paper introduces new data on women's entrepreneurship. Like ethnic minority employers, who prefer co-ethnic employees, women employers exhibit a hiring preference for women. As it does for ethnic minorities, this hiring preference modestly corrects women's earning inferiority, but it does not reduce industrial niching. Although often conflated, segregation and earnings are two distinct dimensions, not one. Women employers increase demand for women employees, raising their earnings, but women employers do not also reduce gender segregation. Because women are under-represented in entrepreneurship, the corrective effect of women's entrepreneurship on women's earnings is modest but positive. This result also parallels the limited advantage that ethnic employers afford co-ethnics. Therefore, in a technical sense, under-representation of women in entrepreneurship is an unacknowledged cause of women's earnings inferiority. Women's entrepreneurship will not reach parity with men's in the short run. But, in the longer run, women's entrepreneurship has the potential, appreciably if not fully, to reduce women's earnings inferiority.

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