Roots of the self-employed bared by study

WASHINGTON, D.C.
October 27, 2008 7:18am

College graduates who specialize in social science tend toward self-employment as compared to those with bachelor’s degrees in other subjects, according to a working paper released Monday by the Office of Advocacy of the U.S. Small Business Administration.

“Educational choices for these graduates are correlated with self-employment,” says Chad Moutray, chief economist for the Office of Advocacy and author of the paper. “Although the self-employed closely resemble the larger population in many ways, for graduates of 1993 their choice of majors and their stated values while in college are linked to their occupational choices a decade later.”

Mr. Moutray found that business and management majors are more likely to work in for-profit businesses while those with specialized degrees such as health, education, or biology are more likely to end up working for non-profits and the government. These sectors contain higher educational and health care institutions, both of which tend to require advanced or professional degrees.

He also found that race, ethnicity, and gender did not play a large role in who became self-employed. However, a student’s motivation as measured by a series of “values” questions in 1993, closely tracked with employment decisions a decade later. For example, those who valued job-security were more likely to be government employees, those who desired intellectual challenge were likely to work in non-profits, and those who did not highly value prestige and status were more likely to be self-employed.

The paper, “Baccalaureate Education and the Employment Decision: Self-Employment and the Class of 1993,” used data from the U.S. Department of Education’s Baccalaureate & Beyond data series that survey members of the class of 1993 at graduation and again in 1994, 1997, and 2003.