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New Research from FreshBooks Discovers a 28% Wage Gap Among Self-Employed Women and Men

Today, FreshBooks announces the release of the 2018 Women in the Workforce Report, which finds a 28% earnings gap exists among men and women who work for themselves.

Self-employed professionals have the autonomy to set their own rates, so why does this earnings gap exist?

About This Study: 15 million Americans currently work for themselves, and up to 27 million more could join them in the next two years alone. The majority of self-employed professionals report being happier, healthier and having better work life balance. However, when you work for yourself life is full of uncertainties. Income can be inconsistent, securing a mortgage can feel impossible, and there are very few resources dedicated to helping people price their services.

While there is an extensive body of research that focuses on workers in corporate America, little is known about the millions of Americans that work for themselves. As more employees plan to leave their 9-5s in pursuit of self-employment the world is going to have to change in order to support the new, and increasingly independent way people work.

That’s why for the past two years, FreshBooks has run a comprehensive survey dedicated to sharing insights for and about people who work for themselves. When a significant gender earnings gap was discovered across customer data, FreshBooks decided to dedicate a portion of our annual study to learning more. If self-employed professionals aren’t dependent on corporate compensation decisions as employees do, and can control what they charge their clients, why does a gender earnings gap persist beyond corporate America?

In the first research of its kind, FreshBooks asked women who work for themselves or plan to work for themselves a series of questions to uncover their unique challenges and successes.

Read on to discover why more than 10 million women could become self-employed in the next five years, factors that may contributing to the earnings gap, and the annual median earnings of self-employed professionals controlled for gender, industry and business size.

Today, FreshBooks announces the release of the 2018 Women in the Workforce Report, which finds a 28% earnings gap exists among men and women who work for themselves.

Methodology: FreshBooks conducted this study in collaboration with Research Now. More than, 1,600 women who work full time — either as traditional employees, independent professionals, or small business owners — were surveyed online in November of 2017. Samples have been weighted (as required) to reflect various characteristics of their target populations (e.g., age, gender and industry) leveraging data from the U.S. Census, U.S. Small Business Administration, the NAICS Association and other sources. The study’s margin of error is +/- 2.3% at 95% confidence.

The FreshBooks data science team analyzed a sample of 40,000 user accounts to determine median annual earnings, controlling for industry, business size, and gender. The team made assumptions about users’ gender by analyzing users first names and predicting gendered cultural associations. The team also made assumptions about users gender and biological sex identification. While FreshBooks doesn’t collect demographic data, the team recognizes that an intersectional approach to this research would provide a deeper and more complex understanding of the earnings gap across a range of dimensions of diversity.

About: FreshBooks is the #1 accounting software in the cloud for self-employed professionals and their teams. Our new series Paid in Full uses big data to help small business owners earn their worth and run a successful business. We’re sharing proprietary data to demystify the uncertainties that surround working for yourself — from the range of rates your industry peers are charging, to whether or not small business owners out earn their traditionally employed peers.

Contact: Carly Moulton, Data Insights and Communications Manager, Lindsay Lapchuk, Sr. PR Manager

Email: pr@freshbooks.com

Phone: 416.780.2700 ext. 361

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