Population Research and Policy Review 20: 291–320, 2001.
© 2001 Kluwer Academic Publishers. Printed in the Netherlands.
Self-employment disadvantage in the working lives of blacks and
& MICHAEL S. RENDALL
Department of Rural Sociology, University of Wisconsin-Madison, USA;
Sociology, Pennsylvania State University, USA
Abstract. Self-employment, regardless of its quality, offers the advantage of keeping indi-
viduals employed, thereby contributing to a continuous work history and earnings over the
lifetime. But in the individual life cycle, how important is self-employment, particularly given
evidence that self-employment spells tend to be of short duration? Also, to what extent does
self-employment contribute to race and gender differences in lifetime employment? We use
an increment-decrement life table to analyze the role of self-employment in differentiating
the working lifetimes of blacks and women from those of white men. White men’s aver-
age lifetime years spent in self-employment exceed black men’s by as many as six years,
thus accounting for nearly the entire difference between white and black men’s lifetime
years employed. White women’s self-employment episodes, while almost as numerous as
white men’s, are shorter and less connected to wage-employment episodes. Black women’s
self-employment episodes are both infrequent and of short duration.
Keywords: Gender, Inequality, Life table, Self-employment, Race
Race and gender differences in labor market outcomes continue to have
profound implications for individual, family, and societal well-being. Dis-
parities in labor force participation, employment, and earnings have all been
associated with black-white differences in morbidity, mortality, crime rates,
and family formation (Wilson 1978; Sorlie 1995). For women, gender dif-
ferences in labor market outcomes have implications for changes in their
socioeconomic status upon divorce or widowhood (Holden & Smock 1991).
Such race and gender inequalities are typically considered with respect to
the contrast between wage-and-salary employment and unemployment or
withdrawal from the labor market. Self-employment provides another con-
trast in labor market outcomes with possibly important implications for the
socioeconomic status of women and minorities. Self-employment, regardless
of its quality, offers the advantage of keeping individuals employed, thereby
contributing to a continuous work history and earnings over the lifetime.