7.7% of female workers nationwide own their own business, according to data from the U.S. Census Bureau. For many of these women, entrepreneurship offers more flexibility than traditional jobs, which is appealing. But starting a business is also risky. New business owners often take a pay cut, as it can take years for new businesses to turn a profit. The median annual income for full-time female entrepreneurs is $40,000, slightly lower than the median annual income among all full-time female workers of $43,000.
While full-time female entrepreneurs—defined here as self-employed workers in their own incorporated or unincorporated businesses—earn about the same as full-time female employees at private companies, they earn less than those working for nonprofits, state and local government, and the federal government.
Compared to men, women earn less across all worker classes. However, the gender wage gap among full-time entrepreneurs—a full $15,000 per year difference—is the largest. Research by the JPMorgan Chase Institute shows that female-owned small businesses tend to be smaller and generate less revenue than male-owned small businesses. One reason is that women-owned startups are underrepresented among firms that receive external financing, according to the JP Morgan Chase report.
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