Recent Research:Study Reveals Women Sole Proprietors Outpaced Men in Growth, Lagged in Earnings

The growth rates of female sole proprietors in the numbers of businesses, gross receipts, and net income were more than double that of their male counterparts between 1985-2000. However, sole proprietorships were still male-dominated, with male sole proprietors having a larger share of the total number, receipts, and net income, according to a working paper from the Small Business Administration.

The study, U.S. Sole Proprietorships: A Gender Comparison, 1985-2000, uses U.S. sole proprietorship data tabulated by the Statistics of Income Division of the Internal Revenue Service to determine information about U.S. sole proprietorship by gender. Some of the categories measured include business size, owner's marital status, industry categories, net income, growth, and business receipts.

While women outperformed men in terms of growth, they were behind in wage earnings and total sales. Data from the study indicate that most U.S. sole proprietorships are small, and more than 50 percent of sole proprietors are simultaneously salary and wage earners. In 1999, male sole proprietors earned an average $43,022 in salary and wages and $7,863 in sole proprietorship income. In comparison, females earned half of that; $21,830 in salary and wages and $3,905 in sole proprietorship income.

In terms of total sales, women sole proprietors earned a fraction of their male counterparts, the study says. For example, in 2000 male proprietors earned gross receipts of $120,402 in the sectors of Finance, Insurance and Real Estate, compared to $42,433 in gross receipts for female sole proprietors. In Wholesale and Retail Trade, males earned gross receipts totaling $113,191, compared to $27,145 for female sole proprietors, a mere 24 percent of their counterparts' gross sales. Other highlights from the study include:

• In terms of annual growth rates, female sole proprietors outperformed their male counterparts with growth of 4.08 percent annually on average;
• The proportion of female sole proprietorships increased, from less than 31 percent in 1985 to more than 37 percent in 2000;
• A higher proportion of women than men sole proprietors were not married. More women business owners became heads of households with dependents during the time period measured;
• A higher proportion of men than women sole proprietors operate larger businesses, but total gross receipts are more evenly distributed among women sole proprietors with medium-sized businesses;
• More than half of total sole proprietorships were concentrated in the 10 most populous states, of which Florida had the highest growth, followed by New York and North Carolina;
• Gender segregation existed in ten industrial sectors. This segregation, according to the author, creates a unique opportunity for sole proprietors' businesses to grow in their gender counterpart's territory; and
• Women sole proprietors grew faster than their male counterparts in nearly every industry, except in Agriculture, Forestry and Fishing. The fastest growing sector for women was Transportation, Communications and Utilities.

While the study may provide useful parallels to gender differences among business owners, the author notes, due to the limitations of data there have been more anecdotal assumptions and claims than solid empirically tested facts on gender differences among them.

U.S. Sole Proprietorships: A Gender Comparison, 1985-2000 is available at: http://www.sba.gov/advo/research/rs263tot.pdf Links to this paper and more than 1,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.