Paths to Self-Employment: The Role of Childbirth Timing in Shaping Entrepreneurial Outcomes

Abstract

This study investigates how the timing of self-employment relative to first childbirth shapes long-term entrepreneurial outcomes among Israeli mothers. Drawing on rich administrative panel data from the Israeli National Insurance Institute (N = 73,141 woman-years), we follow a cohort of women who gave birth for the first time in 2010, tracking their employment trajectories over 15 years (2005–2019). Using random-effect logistic regressions, OLS models, and fixed subgroup analyses, this study compares women who entered self-employment before childbirth with those who did so afterward. The results reveal that postnatal entrants are more likely to operate smaller businesses and exit self-employment earlier, yet often earn higher income from wage employment, compared to their prenatal counterparts. By tracing these outcomes over time, this study demonstrates how key life events, such as childbirth, structure women’s employment paths and contribute to differentiated patterns of labor market participation. Situated in a context of near-universal motherhood and limited public support for working parents, the findings offer insight into the dynamic links between family formation, employment timing, and entrepreneurial sustainability. By adopting a life-course perspective, this study demonstrates how the sequencing of family and employment transitions intersect to shape access to economic resources and entrepreneurial sustainability.

1. Introduction

A large body of research focuses on self-employment and the factors shaping entry into entrepreneurship (Hamilton 2000; Jafari-Sadeghi 2020; Patrick et al. 2016). While men frequently enter self-employment driven by income prospects or entrepreneurial aspirations, research suggests that women, and particularly mothers, may be more influenced by the flexibility it offers for combining paid work and caregiving (Burke et al. 2002; Lombard 2001; Joona 2018; Chudner et al. 2025). However, growing evidence suggests that self-employment increasingly entails characteristics of precarious work. This includes the expansion of solo self-employment, freelance activity, and nano- or micro-enterprises—forms of work often marked by limited job security, an unstable income, and restricted access to social protections (Conen and Schippers 2019; Leighton 2016). Much of the literature on gender and self-employment has interpreted women’s entry into these arrangements through what Vosko and Zukewich (2006) describe as a “precarious by choice” framework. Yet this framing often fails to account for the constraints that lead women to self-employment, particularly when standard employment is inflexible or poorly adapted to caregiving demands. These constraints are especially salient in welfare contexts where institutional support for working parents is limited and mothers must navigate childrearing and employment with fewer public resources (Matysiak and Mynarska 2020; Bozzon and Murgia 2021).

Most existing studies have focused on the relationship between self-employment and fertility, examining how self-employment affects the likelihood and timing of childbearing, or vice versa (Carr 1996; Noseleit 2014; Wellington 2006; Joona 2018). However, less attention has been paid to how the timing of self-employment relative to childbirth shapes long-term labor market outcomes. In particular, there is a lack of research examining how entering self-employment before or after the birth of a first child influences subsequent business trajectories, including the business size, duration in self-employment, and income patterns over time. This gap is especially notable given that most studies on motherhood and self-employment have emphasized short-term effects or transitions into employment, often without considering the lasting implications of when self-employment occurs in relation to family formation. Yet these questions are important, as the timing of such transitions can shape women’s long-term economic paths in distinct ways, affecting how they remain attached to the labor market, what forms of employment they sustain, and the conditions under which they do so. Adopting a life-course perspective, this study examines how the timing of self-employment relative to first childbirth affects the employment trajectories of Israeli mothers. Specifically, we ask whether entering self-employment before or after first birth is associated with distinct long-term outcomes. We use anonymized longitudinal administrative records from the Israeli National Insurance Institute (NII), which include detailed yearly information on income from wages and self-employment, demographic characteristics, and social benefits for the entire Israeli population. Focusing on women whose first childbirth occurred in 2010, we follow them from 2005 to 2019—five years before to nine years after childbirth. This longitudinal design allows us to explore how employment decisions unfold over time and in connection with family formation. We examine three key outcomes: business size, as an indicator of market engagement; business survival duration, reflecting the sustainability of entrepreneurial activity; and income derived from both self-employment and wage employment.

The Israeli case offers a particularly valuable setting for this study. Israel is a family-centered society, characterized by high marriage and birth rates (Ekert-Jaffe and Stier 2009; Hashiloni-Dolev 2018; OECD 2023a). Fertility rates are the highest among OECD countries, with 2.9 children per woman in 2022, and ideals of large families are common even within the secular population (Okun 2016; OECD 2023a)1. Childlessness and one-child families are rare, and the decision to have children—along with the timing and spacing of births—is heavily shaped by social norms. As a result, Israeli women tend to follow remarkably uniform fertility trajectories. This demographic consistency offers a unique advantage: it reduces variation in family formation and allows us to focus more precisely on variation in employment timing, particularly around the birth of the first child.

Our contribution is multifaceted. First, we provide empirical evidence on how the timing of self-employment relative to childbirth is associated with distinct labor market outcomes over time, including differences in business scale, self-employment duration, and sources of income. Second, we contribute to scholarship on work–family dynamics by situating these patterns within a socio-cultural context where motherhood is nearly universal, but where public support for work–family reconciliation is limited and where mothers often develop individualized strategies for balancing paid work and caregiving (Bernardi et al. 2019; Herbst-Debby and Achouche 2023). Third, while existing research on motherhood and self-employment often centers on short-term fertility decisions or transitions into employment, we extend the literature by examining the long-term consequences of self-employment decisions, following women well beyond the initial years after childbirth. Finally, this study contributes to debates on maternal labor market agency by interrogating the conceptual distinction between “choice” and “necessity.” Rather than taking this binary as given, we explore how temporal positioning—entering self-employment before versus after childbirth—interacts with institutional constraints to shape women’s economic trajectories. In doing so, we offer a more nuanced understanding of how agency is exercised under conditions of structural limitation and familial obligation.

The rest of this paper is structured as follows. Section 2 reviews the theoretical background. Section 3 introduces the data and variables. Section 4 discusses the methodology. Section 5 presents the results. Finally, Section 6 discusses the findings and concludes.

2. Theoretical Background

2.1. Motivational Differences Between Mothers and Women Without Children

Research has long suggested that women often transition to self-employment under different labor market conditions than men, frequently in response to limited access to wage and salary jobs with adequate compensation and flexibility (Alba-Ramirez 1994; Giacomin et al. 2023; Chudner et al. 2025). Others transition from wage employment to self-employment due to dissatisfaction with working conditions, aspirations for advancement, or the desire for greater control over work schedules. These transitions may occur at different stages of the life course and are often shaped by family responsibilities, including childbirth.

In examining the antecedents of individuals’ transitions to entrepreneurship, scholars have recognized that women and men differ profoundly in their entry motives (Müller and Arum 2004; Thébaud 2016; Jung et al. 2017; Castellaneta et al. 2020). Within the literature, the timing of entry into self-employment has emerged as a meaningful dimension. Joona (2018), for instance, in a study of Sweden, found that women who became self-employed after childbirth tended to report higher revenues and firm sizes than those who entered beforehand, even though exit rates were similar. These findings point to important distinctions in how employment transitions unfold depending on the life-course stage.

The distinction between “push” and “pull” pathways into self-employment offers a useful interpretive lens through which to understand such differences (Amit and Muller 1995; Hughes 2006; Ferrín 2021). Individuals with greater human capital—such as higher education or relevant experience—may be pulled into self-employment by opportunity, autonomy, or financial promise. Others may be pushed into it due to constraints such as limited job availability, poor working conditions, or incompatible demands in the wage labor market. In some cases, self-employment may also serve as a transitional stage toward more secure or rewarding wage employment (Acs 2006; Cowling and Wooden 2021). The literature often argues that low-wage workers are more likely to be pushed into self-employment, whereas high-wage workers are expected to be rather pulled into self-employment by attractive opportunities (Martiarena 2020). As such, both the most ambitious and the most disadvantaged workers are likely to become self-employed.

In recent years, scholarship has increasingly recognized that self-employment is experienced differently depending on one’s position within social hierarchies (Conen and Schippers 2019; Wall 2015). While self-employment is sometimes framed as a precarious alternative to wage labor (Henley 2023; Kalleberg and Vallas 2017), it may also represent a viable economic strategy for women and minorities who face structural barriers in the formal labor market (Aldrich and Waldinger 1990; Goffee and Scase 1983; Osowska 2016).

Entrepreneurship among women and ethnic minorities is often rooted in structural “push” factors, such as labor market segmentation, a lack of access to stable employment, and cultural or religious discrimination, which lead minorities and women into self-employment (Brush et al. 2009; Essers and Benschop 2009). Within these contexts, self-employment may emerge not merely as a last resort, but as a strategic form of agency that reconciles competing demands (Baker and Welter 2020): it can allow for income generation while preserving alignment with traditional gender norms and community expectations (Verduijn and Essers 2013). Thus, self-employment may offer an adaptive strategy tailored to the positionality of marginalized women who cannot access stable wage employment due to discrimination, care responsibilities, or community expectations. Unlike mainstream entrepreneurs who may pursue autonomy or wealth, these actors may prioritize flexibility, respectability, or social legitimacy (Datta and Gailey 2012; Rindova et al. 2009). As such, self-employment might be both a site of precarity for some and a potential advantage for others.

These distinctions are particularly relevant to women’s self-employment trajectories. Socio-demographic characteristics such as one’s education, age, marital status, and number of children help capture the structural and institutional contexts in which women make employment transitions. Prior research shows that women who are pushed into self-employment—often due to limited access to quality-wage jobs—are more likely to enter occupations for which they are overqualified. This mismatch between skills and occupational demands can lead to lower earnings, restricted career advancement opportunities, and reduced job satisfaction, particularly when entry is driven by economic constraints or job market challenges (Vosko and Zukewich 2006; Redmond et al. 2017; Pines et al. 2010). These disadvantages may undermine both the sustainability and the longer-term economic returns of self-employment. Conversely, women, particularly mothers, may be pulled towards self-employment by the desire for greater control over work arrangements, even when this choice involves financial trade-offs. Prior research suggests that self-employment choice amongst mothers is often motivated by the desire for greater flexibility in their work schedules and the opportunity to achieve a better work–life balance (Lombard 2001; Wellington 2006; Hilbrecht and Lero 2014; Noseleit 2014; Chudner et al. 2025). In these cases, self-employment represents a proactive strategy to accommodate family obligations rather than a response to constrained labor market options.

These contrasting pathways underscore the importance of examining not only who enters self-employment, but also when such transitions take place across the life course. While much of the literature distinguishes between women who are pushed into self-employment by structural constraints and those who are pulled by autonomy, flexibility, or opportunity, less attention has been paid to how the timing of entry—particularly in relation to key life events such as childbirth—shapes employment trajectories. For many women, the decision to enter self-employment may reflect not only labor market conditions, but also changing needs and constraints associated with family responsibilities.

2.2. Self-Employment Timing Relative to Fertility

The dynamics between self-employment and the timing of fertility decisions represent a nuanced interplay of various factors. The empirical evidence presents divergent perspectives, with some studies indicating potential economic advantages associated with initiating self-employment before parenthood, while others suggest that self-employment may be particularly appealing to mothers seeking flexibility and a better work–life balance (Lombard 2001; Wellington 2006; Budig 2006; Hilbrecht and Lero 2014; Chudner et al. 2025). However, it is crucial to recognize that self-employment often entails demanding and less predictable working hours, particularly during the initial stages of business establishment, which may pose challenges to achieving a satisfactory balance between professional and family responsibilities (Hyytinen and Ruuskanen 2007; Benz and Frey 2008).

Career decisions are intricately shaped by familial and social networks, as emphasized by the linked lives theory, which underscores how interconnected family and occupational trajectories influence behaviors and opportunities over time (Moen 2003, 2011). This perspective highlights how past familial interactions and social networks influence current decisions and future opportunities. Consequently, individuals often consult with family members when considering combining self-employment with family life (Hilbrecht and Lero 2014; Carrigan and Duberley 2013), emphasizing that such decisions are embedded within relational contexts rather than made in isolation (Moen 2003, 2011). These decisions are further influenced by gendered roles entrenched in social institutions and cultural norms (Herbst-Debby and Achouche 2023; Bozzon and Murgia 2021). Thus, self-employment offers flexibility that aligns with parental expectations, particularly for mothers adjusting to career and family stages (Walker and Webster 2007; Chudner et al. 2025).

Women’s decisions on whether to start their own businesses and at what stage in their life course (before or after becoming mothers) are closely tied to country-specific policies regarding a work–family balance and support for small business creation (Bernardi et al. 2019; Matysiak and Mynarska 2020; Kanji and Vershinina 2024). In countries with limited public support for reconciling work and family responsibilities and where setting up a small business is straightforward (e.g., simplified administrative processes and easy access to capital), women may be more inclined to pursue self-employment to manage paid work alongside childrearing (Budig 2006). Conversely, mothers who have access to well-compensated parental leave and the opportunity to return to their pre-birth jobs, coupled with quality public childcare, might hesitate to choose the less stable path of entrepreneurship (Rønsen 2014; Joona 2018; Wood and Neels 2019), especially if barriers to starting a business are significant.

Last, the scholarly literature suggests that individuals transition to self-employment not only to enhance their economic circumstances, but also to attain a better work–life balance, particularly in contexts where traditional gender roles prevail (Lombard 2001; Noseleit 2014; Bozzon and Murgia 2021). Discrimination against mothers in the labor market may limit employment opportunities for women with children, prompting some to explore self-employment as a means of leveraging their skills and expertise to create employment opportunities for themselves (Correll et al. 2007; Cowling and Wooden 2021). Therefore, while self-employment is often framed as a path to autonomy, it frequently emerges in response to the structural constraints of the wage labor market. For many mothers, the transition reflects not a move toward improved job quality, but rather a reallocation of risk (Vosko and Zukewich 2006). Instead of securing a stable income, social protections, or legal entitlements, they must navigate fragmented career paths marked by income volatility, social insecurity, and limited institutional support—features commonly associated with precarious employment (Conen and Schippers 2019). In this sense, self-employment functions less as a route to “decent work” than as a pragmatic adjustment to its absence. Yet, these same trajectories may also generate new possibilities—albeit unevenly—for control over one’s working time, alignment with caregiving responsibilities, or avoidance of employer discrimination.

2.3. Self-Employment, Fertility, and Performance

The circumstances under which a business is initiated, particularly whether women were childless or had children, may influence their self-employment performance. Investors and business partners may exhibit a preference for women without children, viewing them as more productive due to the perceived absence of conflicting family responsibilities (Noseleit 2014; Kacperczyk et al. 2023). Consequently, childcare responsibilities can exert a detrimental effect on the survival and success of self-employment ventures, resulting in a higher prevalence of small-scale enterprises operated by mothers from home on a part-time basis, often yielding modest profits (Hughes 2006; Rey-Martí et al. 2015; Redmond et al. 2017). Hughes (2006) underscores this dynamic, noting that women who enter self-employment for “work-family” reasons often report lower incomes compared to those driven by traditional motives such as independence, challenge, and financial gain. For example, Rybczynski’s (2015) examination of self-employment survival in Canada reveals a gender disparity: while the likelihood of women exiting self-employment increases with the number of children under 15 years old, the presence of children does not significantly impact the business survival of men.

As such, while women who enter self-employment prior to parenthood may, at least temporarily, circumvent certain challenges associated with motherhood, such as bias from economic stakeholders or time constraints, those who embark on entrepreneurial ventures after becoming mothers must confront these obstacles in addition to the inherent challenges of a business startup. Consequently, although all self-employed mothers bear the costs associated with motherhood to varying degrees, those who transition to self-employment after having children may encounter more significant disadvantages.

Building on the literature reviewed above and focusing on differences between women who became self-employed before and after the birth of their first child, we propose the following hypotheses:

H1. 

Women who were self-employed prior to the birth of their first child will have a longer cumulative duration of self-employment in the years following childbirth, compared to those who entered self-employment only afterward.

H2. 

Among women who become self-employed, those with pre-birth self-employment experience will be less likely to own small businesses as compared to normal and/or large size businesses after childbirth, suggesting a stronger market position or different business orientation.

H3. 

Women who were self-employed prior to childbirth will earn more in the post-natal period, on average, than those who entered self-employment afterwards.

2.4. The Israeli Context

Israel has been characterized as a family-centered society with high marriage and fertility rates (Hashiloni-Dolev 2018). Marriage in Isarel is almost universal and Israel has the lowest levels of non-marital fertility rates among the OECD countries (Ekert-Jaffe and Stier 2009; Weinreb et al. 2018). Moreover, although the age of first marriage has risen during the past four decades, it is still relatively low, at 25 on average in 2019 (OECD 2019a). Women give birth for the first time when they are, on average, 27 years old (CBS 2022). Additionally, despite an increase, divorce rates in the Israeli society remain significantly lower than those in other Western countries (Lurie and Stier 2022). Motherhood for Jewish women in Israel is believed to be the most important part of a woman’s identity and is considered “a national duty” (Birenbaum-Carmeli 2016). The rate of women who remain childless at the end of their fertility years amongst Jewish Israeli women is one of the lowest in the OECD at 6.4%, (Weinreb et al. 2018) and less than 1% of women who have children will have less than two children by choice (Okun 2016). Still, it should be noted that important total fertility variations exist between subgroups of the Israeli population (Okun 2017).

Despite having the highest fertility rate in the OECD (OECD 2023a), the employment rate of mothers is high, and some researchers have found that the motherhood income penalty is small or non-existent, whereas others have found a penalty only for low-skill mothers (Budig et al. 2023; Gafni and Siniver 2015).2 However, Israel is characterized by a high level of gender segregation in the workplace and a high gender wage gap compared to other OECD countries (20.8% in Israel vs. 11.4% OECD average) (Fuchs 2016; Mandel and Semyonov 2006; OECD 2022). Maternity leave is relatively short and no additional parental leave is granted to fathers; child allowances are low, and publicly funded daycare for children under three years old is extremely limited (OECD 2018, 2019b, 2020).

The proportion of female entrepreneurs in Israel lags men, with self-employed women predominantly found in smaller businesses and specific occupational branches like services and retailing (Kark and Waismel-Manor 2016). However, recent trends show a rise in female self-employment despite a slight decline among men (OECD 2023b).

Israeli society is stratified along multiple lines, including nationality, ethnicity, and religiosity. At the broadest level, the population is divided between Israeli Jews and Israeli Arabs (often referred to as Palestinian citizens of Israel or Israeli-Palestinians). As of April 2018, Israel’s total population stood at 8.842 million, comprising 6.589 million Jews (74.5%), 1.849 million Arabs (20.9%), and 404,000 individuals (4.6%) categorized as “others”—including non-Arab Christians, adherents of other religions, and those with no declared religious affiliation (CBS 2019).

A second main axis of differentiation is within the Jewish population and concerns religiosity. The primary distinction is between ultra-Orthodox (Haredi) Jews—who made up approximately 12% of the Jewish population in 2019 (Malach and Cahaner 2019)—and non-Haredi Jews. The Haredi community is characterized by religious insularity, large family sizes, strict gender norms, and high levels of poverty. Socially and economically, it tends to remain separate from the broader Israeli public sphere (Malach and Cahaner 2017).

Despite formal citizenship, Israeli Palestinians face systemic marginalization, including geographic segregation, underinvestment in infrastructure and education, and persistent labor market discrimination (CBS 2022; Kraus and Yonay 2018). Israeli-Palestinian women, especially Muslim women, experience some of the lowest rates of labor force participation in Israel and are often confined to low-paid, precarious employment or dependent on the public sector (Sa’ar 2017; Kraus and Yonay 2018). Despite low overall self-employment rates among Palestinian women, some have turned to entrepreneurship as a means of overcoming structural exclusion (Masuri et al. 2025). In both groups, religious and ethnic identities help shape opportunity structures that may enable entrepreneurship within segregated or community-specific niches.

Among Haredi Jews, the role of women as primary breadwinners, undertaken to support their husbands’ full-time religious study, has long been legitimized as a spiritual duty (Friedman 1991; Raz and Tzruya 2018). Over time, this role has contributed to increased educational attainment and greater participation in the labor market, including a gradual rise in business ownership (Baikovich et al. 2022; Masuri et al. 2025). The community’s growing economic precarity, alongside the limited availability of positions in traditional employment sectors such as teaching, has led many Haredi women to pursue alternative sources of income through entrepreneurship (Malach and Cahaner 2017; Baikovich et al. 2022).

Therefore, for ultra-Orthodox women, entrepreneurship may offer a way to reconcile cultural respectability with aspirations for economic independence. For Palestinian women, self-employment can represent a pragmatic response to limited access to the labor market and community norms surrounding gender roles. Consequently, self-employment may not simply reflect a lack of alternatives, but rather serve as a channel through which strategically positioned women in marginalized communities exercise agency. Those who enter self-employment may be positively selected, meaning they are not randomly drawn, but are more likely to have access to community resources, supportive networks, or the ability to operate within cultural constraints. In the case of ultra-Orthodox women, this may include those with a higher education or professional training. For Palestinian women, it may involve navigating patriarchal limitations while leveraging ethnic solidarity within ethnic economies. Thus, while overall self-employment rates remain low, the women who pursue this path may be particularly resourceful or strategically positioned.

In this context, Israel presents a compelling case to explore whether self-employed mothers who initiated their businesses before having children fare differently from those who started afterward. Therefore, we hypothesize the following:

H4. 

In a context where motherhood is highly valued and childcare support is limited, initiating self-employment early may result in superior business outcomes regarding survival, size, and income compared to those who start later and face greater challenges balancing family responsibilities with entrepreneurship.

H5. 

Self-employment could provide a viable economic path for marginalized groups, like Palestinian or ultra-Orthodox women, potentially leading to a more favorable self-selection into entrepreneurship compared to the majority population.

3. Data and Variables

Our dataset is based on anonymized administrative data from the Israeli National Insurance Institute (NII) database. The dataset includes wages and income from self-employment, pensions, and allowances as well as socio-demographic characteristics and covers the Israeli population as a whole—which allows us to refer to relatively small population sub-groups.

We focus on women whose first birth occurred in 2010 and follow them over a 15-year period, from 2005 (five years prior to childbirth) to 2019. From this population, we retained only those who were self-employed at some point during the period and who had a positive income in at least one year between 2005 and 2019. This includes women who alternated between wages and self-employment across different years. To ensure that all women had completed at least secondary education at the start of the observation period, we restricted the sample to those who were aged 18 or older in 2005. By the end of the study period in 2019, the youngest women in the sample had reached the age of 39, close to the end of typical childbearing years3.

The panel data consist of a sample of 73,141 women/year. The self-employed, as defined by the NII, are women who meet one of the following conditions: (1) The woman worked at least 20 h a week (on average). (2) The monthly income from work was equal to or exceeded 50% of the average monthly wage in Israel, that is, NIS 5276 as of 2022 (about USD 1500). (3) The woman engaged in her profession at least 12 h a week and her income was higher than 15% of the average salary as of 20224, that is, an income equal to or above NIS 1583.5

Variables

We have three dependent variables: The first is the cumulative duration of self-employment between 2011 (one year after the first birth) and 2019. The second is a yearly indicator of being a small business owner (as described by the NII) compared to having a larger business size. The small business ownership status is determined according to the annual turnover of the business (the total income from transactions conducted in the tax year). In order to be defined as a small business, the annual turnover (not profit) of the business must not exceed the amount of 120,000 NIS a year. The last is the logarithmic transformation of a woman’s post-natal average annual income as self-employed and as a wage employee.6

Our main independent variable is “before”, which indicates if the woman was self-employed before the first birth (yes = 1; no = 0). We also included a set of socioeconomic, familial, and demographic controls such as age and the yearly number of children—coded into 1 child and 2+ children.7 In addition, a yearly indicator of residing in a geographical periphery is considered (1 if living in periphery, i.e., living in the south and north districts of Israel and 0 otherwise), as well as a yearly indicator of receiving disability benefits (1/0) and being single parent (1/0).8 To this list we added a set of fixed indicators reflecting different ethnic and religious affiliations within the Israeli population: Israeli-Palestinian (1) vs. Israeli-Jews (0); immigrants (1) vs. non-immigrants (0); ultra-orthodox Jews (1) vs. others (0). Furthermore, we include a yearly indicator with respect to academic education (1/0). Last, we also used an indicator as to which income quintile the woman belonged before the first birth (2009).9

4. Methods

We ran separate random effect logistic panel regressions for each of the following variables: (1) being self-employed and (2) being “small” self-employed (a sub-group of the self-employed group). The random effects model was chosen because it allows us to estimate the effects of individual characteristics that do not vary over time. Moreover, Greene (2018) states that the random effect model is appropriate “if we believed that sampled cross-sectional units were drawn from a large population” (p. 404), a condition that applies to our case.

To further examine persistence in self-employment according to the self-employment experience, we used OLS regressions of the cumulative post-natal number of self-employment years at the end of the period (2019) on the control variables. We ran the model for the entire sample in addition to two separate regressions, one for women who were self-employed before the first birth and one for those who became self-employed only afterwards.

We last ran separately four OLS random effect panel wage regressions to explain the income from work after the first birth (2010 onward) for four groups: (1) (log) annual earnings from any work (employed or self-employed earnings), (2) (log) annual income from self-employment if relevant, (3) (log) income of self-employed women that became self-employed before first birth, and (4) (log) income of self-employed women that became self-employed after first birth.

Throughout the models (the logistic regression models and the linear regression models), our focus is on the difference between women who were self-employed before their first birth and those who did not allow us to look at two stages in a woman’s life course (before and after she gives birth). In the pooled regressions, we included a dummy variable indicating whether a woman belongs to the former group. The separate regressions for each subset (women who entered self-employment before giving birth and women who entered self-employment after giving birth) were ran to ascertain potential disparities in the impact of each variable on these distinct groups.

5. Results

5.1. Descriptive Statistics

In this subsection, we present the descriptive socio-demographic and socio-economic characteristics of the analyzed sample comparing women who were self-employed before having their first child and after having their first child.

The descriptive overview (

Table 1. Descriptive statistics of women that were self-employed at any given time between 2005 and 2019 and had their first child in 2010.

	All Women	Self-Employment Before Childbirth	Self-Employment After Childbirth
Self-employed		32.9%	66.1%
Self-employed with small business	11.4%	12%	11.1%
Employed (both self-employed and wage-employed)	58.8%	50%	63.1%
Average Yearly Income	62,920 ILS	69,386 ILS	59,748 ILS
(Std deviation)	(74,824)	(81,020)	(71,375)
Age (in 2005)	25	27	24
(Std deviation)	(4.7)	(5.0)	(4.6)
Number of children (in 2019)	2.7	2.4	2.8
(Std deviation)	(1.1)	(0.9)	(1.1)
Palestinian	4.3%	3.6%	4.6%
Ultra-Orthodox	5%	1.2%	6.8%
Immigrant	14.1%	12.8%	14.6%
Single parent	8.2%	12.2%	6.3%
Receive disability allowance	0.1%	0.01%	0.01%
Academic % (B.A) in 2019	52.5%	48.9%	54.2%
Periphery	22.1%	19.4%	23.5%
N	73,141	24,074	49,067

Source: authors’ compilations of NII administrative data, 2005–2019.

) suggests that women who became self-employed before having their first child account for about a third of the population under this study. The rate of the small post-natal business ownership of the two groups is similar. The average employment rate over the period of this study is higher for women who had children prior to self-employment, contrary to the average yearly income that is higher for women who became self-employed before having children.

Compared to women who were not self-employed prior to the first birth, those who were were older and had slightly fewer children. Most Israeli-Palestinian women and ultra-Orthodox women become self-employed after having children, perhaps because women belonging to these groups tend to have children at a younger age compared to secular Jews. The age at first birth is 23.1 years old for ultra-Orthodox women, 25 years old for Israeli-Palestinian women as compared to 28.7 for secular Jews (Weinreb et al. 2018; CBS 2022). Notably, the rate of single mothers among women who became self-employed before having children is double that among the comparison group. Women living in the periphery are over-represented in the group of women who became self-employed after having children.

Figure 1 reports the distribution of the yearly employment status of all women in the sample. The results suggest that many women started transitioning to self-employment around the birth of the first child (2009–2012) and that the percentage of self-employed women is increasing over the years. By 2019, it doubles that of the year before the first birth (2009), whereas the percentage of wage employees is in a continuous decline to a level that, at the end of the period, is about two-thirds relative to 2009. The percentage of non-working women is very low, with a declining tendency over the years. As expected, the percentage of women who do not work is at its peak around the time of the first birth, 2010–2012.

In addition, the chart demonstrates that most women become self-employed after 2010 (i.e., after the birth of their first child). Furthermore, since the rate of self-employed women is continuously rising, it is logical to conclude that the new women who enter self-employment each year were not self-employed before having children.

5.2. Logistic Regressions: Self-Employment and Ownership of Small Business

The two panel logistic regressions reported in

Table 2. Logistic regression of the yearly probability of being self-employed and of being owner of small business after the birth of the first child (2011–2019).

	Self-Employment		Self-Employed, Small Business
	Coefficient	Odds Ratio	Coefficient	Odds Ratio
Self-employment before fertility	0.11 **	1.12	−0.65 ***	0.52
	(0.06)		(0.10)
Number of children	0.29 ***	1.34	−0.06 *	0.94
	(0.02)		(0.03)
Age	0.06 ***	1.06	0.04 ***	1.04
	(0.00)		(0.01)
Palestinian	−0.33 ***	0.72	−0.96 ***	0.98
	(0.13)		(0.26)
Immigrant	0.21 ***	1.23	0.09	1.09
	(0.07)		(0.13)
Ultra-Orthodox	0.09	1.10	−0.44 **	0.64
	(0.12)		(0.22)
Single parent	−0.22 ***	0.80	−0.18 **	0.83
	(0.06)		(0.09)
Disability allowance	0.19	1.21	0.35	1.42
	(0.17)		(0.27)
Periphery	−0.02	0.98	0.06	1.06
	(0.05)		(0.09)
Academic (at least B.A)	−0.34 ***	0.71	0.67 ***	1.95
	(0.05)		(0.09)
Constant	−2.78 ***	0.06	−4.77 ***	0.008
	(0.14)		(0.23)
Chi2	828.99		154.13
N	44,193		44,193

p < 0.1 *; p < 0.05 **; p < 0.01 ***. Source: authors’ compilations of NII administrative data, 2005–2019.

were performed to understand how pre-natal self-employment affects the post-natal yearly likelihood of being self-employed (rather than wage-employed or not employed),10 and that of being self-employed owning a small business (rather than self-employed with a regular business, wage-employed, or not employed).11 The results suggest that having been self-employed before the first birth increases the odds of being self-employed after the first birth by 11%. Focusing on the size of the business, the likelihood that such women own a small business is half that of women who were not self-employed before the first birth.

The number of children raises the post-birth yearly odds of being self-employed, although it lowers the odds to own a small-size business. These results suggest that women with more children might have a greater incentive compared to women with only one child to become self-employed, probably due to the work–family balance and flexibility it might offer.

Relative to the rest of the population, Israeli-Palestinian women are significantly less likely to be self-employed, but even more so where owning a small business is concerned—that is, a Palestinian woman who is self-employed is less likely than the population at large to be an owner of a small business. Ultra-Orthodox women do not have greater odds of being self-employed in relation to the rest of the population; however, when self-employed, they have lower odds of owning a small-size business. These results might indicate that self-employed Palestinian and Orthodox women are a particularly positively selected group, with specific attributes that are necessary to overcome barriers within their community which make them also more likely to be successful as business owners. Interestingly, while an academic degree lowers the yearly odds of being self-employed after having children, it increases the odds of owning a small business. At first glance these results might seem counterintuitive, since we would expect women with high human capital both to have a greater chance of self-employment and lower chance of owning a small business. One possible explanation might be that highly educated women are more inclined to either pursue wage employment, where they may receive high compensation for their human capital, or engage in small business ownership primarily to attain a better work–life balance and flexibility, rather than to achieve significant entrepreneurial success (Berghammer 2014).12 Another possibility is that for some women, particularly those with higher levels of education, small business ownership serves as a response to the lack of flexibility present in wage employment. Thus, rather than reflecting entrepreneurial ambition, it may offer a way to balance work and family demands. However, this flexibility often comes at the cost of employment security, income stability, and access to social protections—placing small business ownership at the edge of precarious work. In contrast, among ultra-Orthodox and Palestinian women, self-employment may reflect a different logic: not necessarily a search for flexibility, but rather an alternative pathway in contexts where access to stable wage employment is limited by cultural constraints, labor market discrimination, or geographic marginalization. In such cases, self-employment may function less as a compromise and more as a channel for upward mobility or relative economic independence.

5.3. OLS Regression: Self-Employment Duration

Table 3. OLS regression of the total number of self-employment years after the first birth (2011) according to self-employment experience.

	All Women	Self-Employment Before First Birth	Self-Employment After First Birth
	(1)	(2)	(3)
Self-employment before fertility	0.41 ***
	(0.09)
Child 1 (2+ the omitted categories)	−0.11	0.01	−0.21
	(0.14)	(0.27)	(0.17)
Age	0.03 **	0.02	0.04 ***
	(0.01)	(0.02)	(0.01)
Palestinian	−0.66 ***	−1.49 ***	−0.34 *
	(0.2)	(0.44)	(0.2)
Immigrant	0.18 *	0.43 *	0.08
	(0.11)	(0.25)	(0.12)
Ultra-Orthodox	0.11	0.13	0.18
	(0.18)	(0.74)	(0.17)
Single parent	−0.28 ***	−0.41 *	−0.12
	(0.12)	(0.22)	(0.14)
Disability allowance	0.12	0.28	0.04
	(0.31)	(0.62)	(0.34)
Periphery	−0.19 **	−0.23	−0.14
	(0.09)	(0.21)	(0.1)
Academic (B.A)	−0.43 ***	−0.67 ***	−0.29 ***
	(0.08)	(0.17)	(0.09)
Number of working months a year	0.07 ***	0.10 ***	0.06 ***
	(0.01)	(0.02)	(0.01)
By quantiles (the first quantile is the omitted category)
2nd quantile	−0.01	0.48	−0.23 *
	(0.12)	(0.3)	(0.13)
3rd quantile	−0.05	0.51*	−0.30 **
	(0.13)	(0.3)	(0.13)
4th quantile	−0.40 ***	−0.46	−0.31 **
	(0.13)	(0.31)	(0.14)
5th quantile	−0.85 ***	−0.73 **	−0.84 ***
	(0.14)	(0.32)	(0.15)
Constant	2.40 ***	2.83 ***	2.26 ***
	(0.42)	(0.86)	(0.47)
N	4777	3211	1566

Note: p < 0.1 *; p < 0.05 **; p < 0.01 ***. Source: authors’ compilations of NII administrative data, 2005–2019.

reports the regression results of the cumulative post-natal self-employment duration on the control variables. Column 1 reports the results of the pooled sample and indicates that, other things being equal, the duration for women who had pre-natal self-employment experience exceeds that of their peers who did not have that experience by about 5 months (41% of a year).

Interestingly, the effect on self-employment survival of having just one child by the end of the period as opposed to having given birth to additional children is not statistically significant. Nor does the effect of receiving a disability allowance or being ultra-Orthodox. In contrast, being an Israeli-Palestinian woman significantly reduces the duration of self-employment compared to Israeli-Jewish women. Specifically, the post-natal self-employment duration of Israeli-Palestinian women who entered self-employment before giving birth is by a year and a half shorter than that of their Jewish peers, but only 4 months shorter if they entered self-employment after giving birth. The result is reversed where immigrant women are concerned. These women have a longer duration of self-employment provided they became self-employed before having children. Being a lone parent reduces the self-employment duration for women who became self-employed before having children. Thus, it seems that Israeli-Palestinian women and single mothers have a greater problem of reconciling their new motherhood responsibilities with their business careers.

Having an academic degree decreases the self-employment duration particularly for women who were self-employed before birth, perhaps due to a better return on education for such women in wage employment compared to self-employment. In fact, belonging to the top of the earning distribution (5th quantile) before childbirth reduces the post-natal self-employment duration by roughly ten months relative to those in the lowest quintile, particularly for those women who became self-employed after birth. This serves as one more piece of evidence that the self-employment mode for such women is inferior to being wage-employed and is chosen either out of necessity or for convenience.

5.4. Income

Finally, turning to income, Figure 2 depicts the average yearly earnings from each source of employment (wage or self-employed). The data suggest that although, initially, the income from both sources is similar, already before the event of the first birth, the income from wage employment starts exceeding that from self-employment. Noticeably, a decrease in the income from both sources is visible in 2010–2011 when women became mothers for the first time. However, at the end of the study period (2019), there is a significant gap between the two sources of income (40,000 ILS).

To better understand factors underlying earning differences of self-employed and wage-employed mothers, the effect of pre-natal self-employment on the yearly earnings of women after the first birth is examined by four multivariate linear panel regressions models (

Table 4. Panel post-natal income regression.

	Total Post-Natal Income: All Women	Self-Employment Post-Natal Income: All Women	Total Post-Natal Income: Women Who Had Pre-Natal Self-Employment Experience	Total Post-Natal Income: Women Who Had No Pre-Natal Self-Employment Experience
	(1)	(2)	(3)	(4)
Self-employment before fertility	−0.22 ***	−0.04
	(0.04)	(0.05)
Years of self-employment	0.04 ***	0.01 *	0.03 ***	0.05 ***
	(0.01)	(0.01)	(0.01)	(0.01)
Number of working months per year	0.52 ***	0.16 ***	0.54 ***	0.51 ***
	(0.00)	(0.00)	(0.00)	(0.00)
Child 1 (base: 2+ children	−0.28 ***	−0.29 ***	−0.42 ***	−0.22 ***
	(0.03)	(0.03)	(0.04)	(0.03)
Age	0.01 *	0.04 ***	0.01 *	0
	(0.00)	(0.00)	(0.00)	(0.00)
Palestinian	−0.85 ***	−0.23 ***	−0.79 ***	−0.88 ***
	(0.09)	(0.11)	(0.18)	(0.10)
Immigrant	0.02	−0.03	0.32 ***	−0.11 **
	(0.05)	(0.06)	(0.10)	(0.06)
Ultra-Orthodox	−0.07	0.37 ***	0.11	−0.09
	(0.06)	(0.10)	(0.30)	(0.08)
Lone parent	−0.03	−0.09 **	−0.04	−0.04
	(0.04)	(0.05)	(0.06)	(0.06)
Receive disabled allowance	−0.33 ***	−0.52 ***	−0.16 *	−0.38 **
	(0.13)	(0.04)	(0.21)	(0.16)
Periphery	−0.05	−0.01	−0.08	−0.04
	(0.04)	(0.04)	(0.07)	(0.04)
Academic (B.A)	0.37 ***	−0.04	0.36 ***	0.37 ***
	(0.03)	(0.04)	(0.07)	(0.04)
Constant	4.84 ***	7.37 ***	4.38 ***	4.89 ***
	(0.11)	(0.13)	(0.19)	(0.13)
chi2	43,504.38	1493.81	29,602.2	14,012.08
N	44,193	21,593	29,786	14,407

Note: p < 0.1 *; p < 0.05 **; p < 0.01 ***. Source: authors’ compilations of NII administrative data, 2005–2019.

). Column 1 reports the (log) income regression for the entire sample while column 2 considers the income generated only during episodes of post-natal self-employment. The third and fourth columns, respectively, concern the total income from both self-employment and wage employment for women who were self-employed before the first birth and those who became self-employed only after the first birth.

The first column of Table 4 indicates that, other things being equal, being self-employed before having children is detrimental to total yearly post-natal earnings. Women who have already been self-employed before having children earn every year as much as 22% less compared to those who became self-employed after the first birth. Nevertheless, longer self-employment duration has a significant though quantitatively small positive effect on the yearly income (4% per additional year of self-employment). This observation is particularly true when considering the impact of the average yearly working months. Every additional employment month yields a large income premium of 52%.13 Interestingly, women having only a single child suffer an income loss of as much as 28% in comparison to those with two children and more. These results could be explained by the fact that having just a single child nine years after giving birth may be a negative signal in the Israeli context. Specifically, this relatively rare event is unlikely to be a result of choice, but rather because of separation from a partner or health reasons that could interact with wages. In support of this conjecture, one may observe that the variable “lone parenthood” (another status which is frowned upon and is relatively rare in Israel) provides no explanation or a quantitively small one. Israeli-Palestinian women earn as much as 85% less than the parallel group of Israeli-Jewish women. These variations can be partly explained by the high segregation existing in the Israeli labor market (Bental et al. 2017; Fogiel-Bijaoui 2016; Yonay and Kraus 2013). Disabled mothers earn 33% less than their counterparts with no disability. An academic degree increases earnings by 37%.

Focusing on earnings from self-employment only (column 2), the pre-natal self-employment experience has no significant impact on earnings and that of the duration of self-employment has only a marginal effect. The working month variable is weaker in the model considering only self-employment-related income as opposed to the total income, while the effect of age is stronger. Being a member of the ultra-Orthodox community increases earnings by 37% in comparison to the rest of the population, suggesting a high selectivity of self-employed ultra-Orthodox women. The penalty of being an Israeli-Palestinian is a quarter that of total earnings.

Columns (3) and (4), which focus on the total income for women who became self-employed either before or after birth, coincide with most of the results of column 1. The only difference concerns the impact of being an immigrant. In column (1), this variable is not significant. The reason for this is revealed by the stark difference between columns (3) and (4) with respect to this variable. Immigrant women who became self-employed before birth enjoy an income premium of 32% compared to non-immigrants, while those who became self-employed after birth suffer a loss of 11%. Consistent with the results in Table 2 and Table 3, it seems that immigrants who chose to become self-employed before birth are characterized by specific qualities which helped them to become successful entrepreneurs.

The finding that mothers who entered self-employment after childbirth earn more from wage employment suggests that post-natal self-employment may function less as a long-term career path and more as a temporary strategy in response to labor market constraints during early motherhood. These women may re-enter wage employment as their children grow older, leveraging their experience and prior human capital in ways that secure higher returns. Another possible explanation is that these women maintain some degree of labor market attachment or continuity (e.g., through part-time wage employment or informal work), which supports smoother transitions back into better-paying jobs. This income pattern may reflect what the literature has described as “adaptive sequencing,” where women adjust their employment choices to align with caregiving demands in the short term without forgoing longer-term occupational trajectories (Moen 2003).

In the case of minority women, the descriptive and multivariate results indicate that ultra-Orthodox and Palestinian women are more likely to enter self-employment after childbirth, and within these groups, those who succeed appear to be particularly positively selected. These findings align with research on “selective permeability” in opportunity structures, where marginalized women access entrepreneurship not as a privileged career choice, but as one of the few viable paths given the cultural, geographic, or institutional constraints (Anthias 2012). For instance, gendered expectations around domestic roles within ultra-Orthodox or Palestinian communities, limited geographic mobility, and employment discrimination in the broader labor market may make wage employment inaccessible or unattractive. As a result, self-employment—despite its risks—offers a route to labor market participation and economic contributions under constrained conditions. The relative earnings advantage observed among ultra-Orthodox self-employed women further suggests that those who overcome these constraints are a highly selected and resourceful group.

6. Discussion

While a growing body of research has explored the relationship between self-employment and fertility, most studies have concentrated on how one influences the timing or likelihood of the other (Noseleit 2014; Joona 2018). Much less attention has been given to how the timing of self-employment relative to childbirth shapes both self-employment outcomes and women’s longer-term labor market trajectories. This is a notable omission, particularly in light of the “mumpreneur” phenomenon, which highlights the appeal of self-employment for mothers seeking greater flexibility and autonomy in their working lives (Lim 2019). Yet, despite growing interest in maternal entrepreneurship, little is known about how these women’s business outcomes develop over time, or how such trajectories differ depending on whether self-employment began before or after motherhood. Our study addresses this gap by analyzing the long-term entrepreneurial outcomes of Israeli mothers who entered self-employment either before or after the birth of their first child. Drawing on 15 years of administrative data from the Israeli National Insurance Institute, we provide empirical evidence that timing matters: women’s business sizes, duration in self-employment, and income compositions vary in meaningful ways depending on when they begin their entrepreneurial activity in relation to childbirth.

Our findings demonstrate that women who entered self-employment after childbirth were generally outperformed by those with prior experience in terms of their business size and longevity. Interestingly, this study finds no significant difference in self-employment income between the two groups, suggesting that while the business performance may vary, the financial returns from self-employment are similar. However, post-natal entrants earned more from wage employment in the years that followed, suggesting a trade-off between the flexibility of self-employment and the greater financial stability of wage employment. This income gap points to a nuanced motivational landscape: post-natal self-employment often appears less as a proactive entrepreneurial move and more as a strategy shaped by care responsibilities or limited access to suitable wage employment opportunities. The shorter business duration and smaller business scale among these women reflect the challenges of sustaining new ventures while raising young children.

The variation in the self-employment duration by skill level further supports this interpretation. Highly educated women—who may have stronger alternatives in wage employment—tend to exit self-employment more quickly. In contrast, self-employment may serve as a more viable or attractive route for low-to-middle-income mothers, particularly those facing limited access to flexible wage jobs. The patterns observed among Palestinian and ultra-Orthodox women suggest that self-employment may also function as a selective pathway into the labor market for marginalized groups. In communities where early childbearing is common and formal employment is less accessible or compatible with social norms, self-employment may provide a rare opportunity for economic participation. That these women often perform well in terms of income or business survival implies that those who do enter self-employment are particularly driven or resourceful.

One limitation of this study is that it includes only women who became self-employed at some point during the observation period and thus does not directly assess selection into self-employment. This raises the possibility that unobserved characteristics—such as entrepreneurial preferences, support networks, or prior informal experience—may shape both the decision to become self-employed and the subsequent outcomes. While our models include extensive controls for socio-demographic factors and pre-birth income levels, and while fertility patterns in Israel are relatively homogeneous, unmeasured heterogeneity in employment motivations remains a plausible source of endogeneity. Importantly, this concern is not only methodological, but also theoretical: the distinction between “choice” and “necessity” in self-employment is central to understanding divergent employment trajectories. Future research could explore this by explicitly modeling transitions into self-employment or applying causal inference techniques to assess the conditions under which women select different employment forms after childbirth.

By focusing on women who became self-employed before versus after their first childbirth, this study demonstrates how the sequencing of family and work transitions relates to long-term business outcomes. Rather than treating maternal self-employment as a uniform category, the analysis shows that timing carries implications for the business size, duration, and income composition, pointing to underlying differences in opportunity structures, constraints, and employment trajectories. The consistent gap in the business longevity and size between pre- and post-natal entrants underscores that when women enter self-employment may be as important as whether they do, particularly in settings where institutional support for combining work and care is limited.