Educational Decisions Correlate With Self-Employment

Social Science Majors And “Others” Gravitate Toward Self-Employment

WASHINGTON, D.C. – 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 today by the Office of Advocacy of the U.S. Small Business Administration. The paper used data tracking a group of university graduates from the class of 1993 through 2003.

“Educational choices for these graduates are correlated with self-employment,” said Dr. 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.”

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.

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.

Moutray 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 Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

For more information and a complete copy of the working paper, visit the Office of Advocacy web site at www.sba.gov/advo.

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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visit www.sba.gov/advo, or call (202) 205-6533.