Barriers to Women's Small-Business Success in the United States

Although ever-increasing numbers of women in the United States have been choosing small-business ownership in an apparent attempt to escape their well-documented inequality in the labor market, in this country, small businesses owned by women tend to be less successful than those owned by men. This article brings together the scattered pieces of data available in order to shed light on women's inability to gain greater parity with men in the small-business arena in the United States. Analysis suggests that U.S. women's influx into small capitalism results from their movement into expanding, but highly competitive, industrial niches that are relatively unattractive to men. The authors find that these woman-owned businesses are concentrated within traditionally female-typed fields with lower average business receipts than male-typed fields. Moreover, even within the same industrial subcategories, women owners achieve less economic success than men owners. Although some of the immediate barriers faced by U.S. women in the small-business arena-such as lack of access to capital and government contracts-differ from those that confront women employees, the underlying causes are similar. The authors' discussion suggests that women in the United States carry their labor market disadvantage with them to the small-business sphere, where it is compounded by new manifestations of the same institutional barriers.