Bridging the Gender Gap in Employment Growth : On the Role of Innovativeness and Occupational Segregation

The employment growth of small firms is an issueof interest to policy makers, but how gender affects this issue is littleexplored and the empirical studies yield mixed results. Thisstudyexamines the question whether female- or male-owned businessesgenerate more employment growth in small firms in Germany. Three major determinants of small venture growth are identified: theentrepreneur's characteristics, firm characteristics, and owner's strategicorientation. In addition, innovation is widely acknowledged as a driving forcebehind the net creation of jobs. Five hypotheses relating gender, innovation,and job growth are presented. The hypotheses were tested using German federal data on 3,262 self-employedpersons (about 1/3 females) gathered in 1998/1999. Measures for innovation,R&D activities, current occupations, occupations trained for, industrialsex segregation, human capital, time input, as well as firm size, age, andindustry were devised. Analysis indicates that female-owned businesses underperformed male-ownedbusinesses. Lower employment growth was mainly due to female's lower commitmentto product and process innovation; this effect is named the female-maleinnovation gap. The cause of the gap derives from occupational sex segregationwhereby women enter fields that are less technical or and less likely toprovide resources and conditions needed for fostering product and processinnovations. (TNM)