The previous chapter examined the mechanisms that excluded women from skilled wage-earning jobs and concluded that unions with some monopoly power were the main exclusionary force. This chapter asks how women were excluded from self-employment. The occupations studied here include the professions, retailing, and entrepreneurship in general. Because the labor market was not perfectly competitive, there was room for gender discrimination. In these occupations, the causes of discriminatory constraints were the family, consumer discrimination, and professional groups organized to circumvent the market.

Economic theory suggests that gender discrimination can only persist where it is protected from competitive forces. The family, because it is not subject to competitive forces, is an important source of discrimination. In this chapter we shall see that women's economic opportunities were limited by family decisions such as investment in human capital and inheritance of capital. Competitive markets protected women against discrimination; only employers who were protected from the discipline of the market, specifically those with some monopoly power, could discriminate against women and survive. Consumer discrimination, however, will not be eliminated by competition. Thus, women are more vulnerable to gender discrimination if consumers care about the gender of the individual making the good or delivering the service. Also, professional organizations made the market less competitive; they took control of employment away from the market, so that they could limit entry to their professions.