What would you do if you suddenly came into a lot of money? Well depending on whether you’re a guy or girl you’re more likely to become an entrepreneur and grow that wealth. That’s according to a new study put out by the University of Stirling and Royal Holloway, University of London.
The study found that single women face more severe constraints to their incomings and outgoings than guys do. However when their wealth shoots up unexpectedly due to a life event such as receiving an inheritence they were more likely than guys to grab life by the horns and become an entrepreneur and starting their own business.
Recent data by the Labour Force Survey has shown a 6% rise in guys becoming business owners, but in the same period there’s been a remarkable 22% rise in females who have taken the plunge and become self employed. When you aren’t getting payed right that’s a pretty good incentive to pay yourself instead.
It doesn’t take much to get pushed over the edge either. Research found that having an extra £1,000 in the bank leads to an 8.5% rise in the chance of a single woman starting her own business.
So women are obviously more than willing to become business owners, but there’s something hold them back. Entrepreneurs aren’t usually made in the wake of someones death after all.
Researcher Tanya Wilson, Early Career Fellow in the Division of Economics at the University of Stirling, said: “There are several possible explanations as to why liquidity constraints are most severe for single women. It could be that single women have less collateral necessary for securing a loan. There may be gender discrimination in the granting of credit. It is also possible that single women are more risk averse than others and choose not to borrow money even when borrowed funds would be forthcoming.
“A glass ceiling may emerge even in self-employment when women suffer relatively more from liquidity constraints than their male counterparts.
“If lack of collateral is the main obstacle preventing a single woman from starting a new business, or expanding an existing one, then a new private initiative or public policy that helps channel sufficient collateral to liquidity-constrained single women would be of great economic and social value. Public policy programmes that encourage business start-ups do currently exist, but they are generally too restrictive to affect a substantial proportion of single women.”