Previous empirical analyses have identified several factors related to the self-employment versus wage and salary employment decision, including the individual's preferences for income and risk, entrepreneurial ability, wealth, marginal tax rate, skill level, and various other personal characteristics. Studies focusing on female self-employment in particular also include variables related to marital status and the presence or ages of children, with child caring behavior studied as well. These factors are related to the perceived greater degrees of autonomy and job flexibility in self-employment.
the most obvious factor related to the choice between self-employment and wage and salary work is the relative earnings expected in each of the respective sectors. Bernhardt (1994), using a sample of Canadian white males, finds that relative potential earnings is the dominant factor in determining the probability of employment in the self-employment sector.This finding has been confirmed by many others, including Rees and Shah (1986) and Taylor (1996) for the UK, Clark and Drinkwater (2000) for England and Wales, Johansson (2000) for Finland, and recently Hammarstedt (2006) for Sweden.