The Nordic Welfare Model: barrier or facilitator of women's entrepreneurship in Denmark?

Abstract

Purpose

The welfare states of Scandinavia have been regarded as forerunners of gender equality, but structural barriers to women's participation in the labour market may discriminate against women and create opportunity costs delimiting women's career choices. Family policies are defined to include maternity/paternity leave, benefits, childcare and leave to take care of sick children. The aim of this paper is to increase awareness and elucidate the impact of welfare policies on women's entrepreneurship because it may impact on women's entrepreneurial behaviour. Hence, it seeks to investigate the reasons underlying this apparent anomaly so that future policies in Scandinavia and Europe may be tailored to suit the needs of female entrepreneurs.

Design/methodology/approach

The study uses publicly available statistical data combined with unique survey data from a sample of 1,000 sole proprietors (men and women), all members of the Danish Association for the Self‐employed, to identify the problems encountered by female entrepreneurs. The survey findings are illustrated with three interviews with female entrepreneurs that have been published in the Danish newspapers discussing the problems encountered by self‐employed female entrepreneurs.

Findings

Even though the various Scandinavian models provide for ample maternity leave, benefits and childcare, on the whole, the Nordic Welfare Model is too heavily grounded in the ideals of employment favouring employment over entrepreneurship. For example, in Denmark, a sole proprietor is not allowed to work whilst on maternity leave. If she does so, her maternity allowance is reduced. This may be tantamount to closing the business down if you have a child, and may account for the fact that women are generally much older than men when starting a business. The majority of women in the survey are critical of the maternity leave system and 30 percent perceive the childcare system as a significant barrier to starting a business.

Research limitations/implications

Future research needs to compare the Danish evidence with that from other Nordic countries to establish whether the problem is restricted to Denmark. Additionally, research should focus on identifying whether child‐bearing and ‐rearing influences on the age at which women start a business.

Originality/value

So far, it has been taken for granted that the initiation of public childcare would facilitate increased entrepreneurship among women. This study shows that this is not necessarily so, and that there is a schism between welfare models that facilitate employment and those that facilitate entrepreneurship.

Citation

Neergaard, H. and Thrane, C. (2011), "The Nordic Welfare Model: barrier or facilitator of women's entrepreneurship in Denmark?", International Journal of Gender and Entrepreneurship, Vol. 3 No. 2, pp. 88-104. https://doi.org/10.1108/17566261111140189