Work-Life Balance and Gender Differences in Self-Employment Income during the Start-Up Stage in Japan

Abstract

This study investigates the determinants of the income levels of newly self-employed workers compared to those of employees, while focusing on the effects of gender and childcare. We argue that working mothers with preschool children prefer self-employment to paid employment, as such arrangements offer better work-life balance. Hence, we predict that self-employed working mothers earn lower incomes than their male counterparts, employed counterparts, and female self-employed worker counterparts who do not have preschool children. Empirical results based on anonymous micro data from Japanese employment statistics support our hypotheses, even when we control for the lower number of working hours of self-employed working mothers.

Keywords: self-employment, income, gender gap, female labor, childcare

JEL classification codes: J13, J16, L26, M13