Gender and entrepreneurial propensity: risk-taking and prosocial preferences in labour market entry decisions

Abstract

Purpose

This study aims to examine gender differences in risk-taking and prosociality through a hypothetical labour market entry choice experiment.

Design/methodology/approach

To explore differences between male and female subjects by risk levels and framing effects, a labour market entry choice task that manipulated risk conditions was administered to business school students whereby subjects chose between a managerial job at a company, starting a commercial business or starting a social enterprise. The experimental design isolated and tested the influence of the type of value creation, risk propensity and framing effects. The results were then statistically analysed to test for significant differences between the two gender groups.

Findings

Results indicate that in low-risk conditions women prefer the prosocial entrepreneurial option while men opt for purely commercial entrepreneurial activities. As risk increases, differences between men and women initially converge and then reverse under conditions of extreme risk, where men select the social entrepreneurial choice at a higher rate than women.

Research limitations/implications

The research was conducted within the single country context of Peru and carried out using a specific subset of potential entrepreneurs (i.e. business school students). Second and related, the experimental labour entry task was hypothetical. Whether decisions would hold if business school students faced an actual occupational choice remains open to further investigation.

Practical implications

The practical implication of the paper suggests that Peruvian business school students react differently towards potential labour market opportunities depending on their gender. Perhaps, because of gender biases common in the Latin American context, women appear to respond more positively to low-risk prosocial opportunities. However, as risk increases, contextual factors appear to become less important and reveal core sets of prosocially anchored men and commercially anchored women.

Originality/value

This research provides new insights into risk-taking and prosocial differences between men and women facing labour entry decisions, especially in a developing country context with strong gender norms, and is particularly useful to those with an interest in entrepreneurial propensity and in the identification and development of entrepreneurial women.

Citation

Reichert, P., Bird, M.D. and Farber, V. (2021), "Gender and entrepreneurial propensity: risk-taking and prosocial preferences in labour market entry decisions", Social Enterprise Journal, Vol. 17 No. 1, pp. 111-139. https://doi.org/10.1108/SEJ-07-2020-0050