An empirical analysis of self-employment in the U.K.

The paper formulates a self-employment/paid-employment choice problem that draws upon Knight's notion that the individual responds to the risk-adjusted relative earnings opportunities in each sector. Based on a development of such choice-theoretic considerations, an econometric model is developed with the purpose of empirically examining the determinants of self-employment. The model features simultaneous determination of employment status and earnings, which allows for self-selectivity. The model is estimated using a sample of 4762 individuals from the General Household Survey for 1978. The estimation of the earnings equation enables a calculation of the self-employment/paid-employment earnings differential and the estimated probit equation for self-employment/paid-employment status facilitates the prediction of the probability of self-employment. The paper finds that there is positive selection bias in the observed earnings of employees, that the probability of self-employment depends positively on the earnings difference between the two sectors and that education and age are significant determinants of self-employment.     

Ethnicity and Self-Employment in Britain

This paper investigates the ethnic dimension of self-employment in the British labour market. It examines how both 'push' and 'pull' factors may lead members of non-white, ethnic minority groups to enter self-employment rather than paid-employment. Push factors include discrimination in paid-employment while pull factors refer to minority-specific entrepreneurial opportunities. Data from the General Household Survey and 1991 Census are employed to evaluate the empirical relevance of these issues and to explore differences between ethnic groups. Evidence of both push and pull factors is found.     

The labor market consequences of experience in self-employment

Many public policies are designed to encourage self-employment. However, because self-employment experiences are typically brief, it becomes important to understand the long-term consequences of entering and then leaving self-employment. Using the Panel Study of Income Dynamics (PSID), we examine the effects of brief self-employment experience on subsequent labor market outcomes. We find that, relative to continued wage employment, brief spells in self-employment do not increase—and probably actually reduce—average hourly earnings upon return to wage employment. We also find that those who experience self-employment have difficulty returning to the wage sector. However, these consequences are small compared to similar experiences in unemployment.     

The Return on Women''s Human Capital and the Role of Male Attitudes Toward Working Wives

A BSTRACT . This study empirically investigates women's work interruption behavior in Taiwan and this behavior's influence on women's earnings. The most striking finding from our analysis of women's work history patterns is that a husband's negative attitude toward a working wife will more greatly discourage his wife from attaching to the labor market than will the presence of young children in the family. Thus, it is critical to educate men to give up their traditional attitudes toward gender roles in order to raise the female labor force participation rate in Taiwan. As to the effect of work interruption on earnings, a depreciation rate of 2.8% is found for women with at least a high-school level of education, while no penalty of foregone experience is shown for less-educated women. Since this depreciation effect may discourage women from re-entering the labor market, government programs encouraging self-employment should be helpful, as self-employed women find it easier to overcome the conflict between family obligations and work needs.     

Does entrepreneurship pay for women and immigrants? A 30 year assessment of the socio-economic impact of entrepreneurial activity in Germany

Abstract

Using data from the German Socio-Economic Panel from 1984 to 2012, we explore income effects of self-employment for females and migrants. Controlling for the selection into self-employment, we differentiate the overall earnings differential between the self-employed and the wage-employed into an endowment effect (they are equipped with characteristics that positively affect earnings in either occupation) and a treatment effect (the income effect solely due to the decision for self-employment). We find that women exhibit both a lower treatment effect and a lower endowment effect than men. Migrants benefit much more from entrepreneurial activities than Germans, having a significantly higher treatment effect. Among the countries of origin, Turkish migrants benefit the most from their self-employment decision, while southern Europeans exhibit the lowest income relevant skills.     

Housing wealth,liquidity constraints and self-employment

This paper investigates the existence of liquidity constraints facing entrepreneurs in the United Kingdom. Using a household-level panel data set, entry to self-employment is shown to be a function of household net worth. We use inheritances and unanticipated movements in house prices as instruments for shocks to liquidity. Results indicate that inheritances are a poor instrument for liquidity constraints because both past and future inheritances predict entry to self-employment. House prices shocks are a more plausible instrument because self-employed households disproportionately re-mortgage, but our results again indicate little evidence of house price shocks unbinding liquidity constraints facing the would-be self-employed.     

Self-employment policies and migrants' entrepreneurship in Germany

This paper presents results from a European project on policy and migrants' entrepreneurship in Germany. It develops a concept of biographical policy evaluation by analysing the extent to which the biographical processes that have led to self-employment among migrants in individual cases correspond to those anticipated by policy. The study identifies a biographical structure composed of two phases that shape the status passage to self-employment. During these phases, personal resources are mobilized and/or attempts are made to access policy support. Self-employment policies are fragmented in that they are designed to address specific stages of the process. Migrants are often excluded from policy participation, either as a result of policy failures or through a manner of implementation that is frequently influenced by prejudices and stereotypes. Deprived of class resources and sometimes unable to utilize ethnic resources, migrant would-be entrepreneurs require public support. The ‘bridging allowance’ scheme to encourage self-employment among the unemployed currently in place in Germany (Überbrückungsgeld) could serve as a model for a more adequate support policy for non-privileged business starters that would better allow for the participation of migrants.     

Transitions to and From Self-employment in Spain: An Empirical Analysis

This paper investigates the influence of individual characteristics and the business cycle on the probability of entry into self-employment and on self-employment duration. We estimate multinomial logit and discrete competing risks models using data from a longitudinal sample of Spanish men for the period 1985–1991. The results indicate that unemployment raises the probability of entering self-employment, but also increases the hazard of leaving self-employment, especially into unemployment. Moreover, receiving unemployment benefits significantly reduces the probability of entering self-employment. Liquidity constraints are important in determining enterpreneurial selection, but only for those who become self-employed with employees.     

Entry dynamics of self-employment in South Korea

The purpose of this paper is to clarify whether the entry into self-employment was an inevitable move due to economic recession (push hypothesis) or a voluntary move due to entrepreneurship (pull hypothesis) in Korea. It also examines how this decision is affected by changes in socio-economic conditions. The empirical analysis in this study exploited the matched sample for the adjacent months in the Economically Active Population Survey (EAPS) conducted by Korea National Statistical Office in 2000–2004. The empirical results showed that the push aspect of self-employment was strong in Korea over the whole sampled periods. The entry into self-employment in South Korea is largely attributable to economic sluggishness and an increase in unemployment rather than a voluntary transition resulting from entrepreneurship. Policy environment (such as providing information and financial support for new start-ups after the Asian financial crisis), which is a country-specific factor magnified the pushed effects. For the pushed (unprepared) self-employed people, not only is there a need to expand the coverage of vocational training programmes, but also it is vital that social safety nets are strengthened and supplemented.     

The responsiveness of self-employment income to tax rate changes

This paper estimates the extent to which self-employment income responds to changes in the net-of-tax share using a panel of tax returns that spans 1987–1996. The results suggest that the elasticity of reported self-employment income to the net-of-tax share is approximately .9, implying a real elasticity (net of any reporting response) of around .4. Estimated elasticities tend to be larger for higher income taxpayers, married males, and females. In addition, the elasticity of self-employment income is considerably larger than the elasticity wage and salary income estimated using the same methodology.     

Cultural background,human capital and self-employment rates among immigrants in Norway

The level of self-employment varies significantly among immigrants from different countries of origin. The objective of this research is to examine the relationship between national culture, human capital in the form of educational attainment in the country of origin and self-employment rates among first-generation immigrants in Norway. Empirical secondary data on self-employment among immigrants from 53 countries residing in Norway in 2004 was used. Five different hypotheses were developed and tested using hierarchical regression analysis. The findings suggest that immigrants from countries with low power distance are more likely to become self-employed. However, other dimensions of cultural attributes, such as the home-country's uncertainty avoidance, masculinity/femininity and individualism/collectivism were not significantly associated with immigrants’ self-employment rate. Finally, and most notably, the average educational attainment in the country of origin was found to be significantly positively associated with self-employment among immigrants. The study concludes with practical implications and suggestions for future research.     

Displacement and self-employment entry

Displacement is expected to decrease the reservation wage of self-employment by decreasing earnings in paid employment and increasing the probability of unemployment. This paper examines whether displacement increases the probability of self-employment using propensity score matching on Swedish register-based data. The data include all individuals displaced due to plant closures in 1987 and 1988, and a random sample of 200,000 employed individuals. The results suggest that displacement almost doubles the probability of entering self-employment the year after displacement. A sub-sample analysis indicates that individuals with a potentially worse position on the labor market react more strongly to displacement in terms of entering self-employment.     

Evaluation of a Flemish Active Labour Market Policy in the framework of the European Social Fund. Results and challenges

The aim of this paper is to evaluate the “Work Experience for Young Persons” (WIJ) programme, which was implemented in Flanders between 2015 and 2018. The WIJ programme is partially financed through the European Social Fund (ESF) and targets unqualified, young, and unemployed people with the aim of facilitating their entry to the labour market. The programme involves a trajectory of intensive guidance that includes labour market orientation and coaching as first phase, plus competence strengthening activities as second phase. This analysis is based on the Flemish Public Employment Service’s administrative data sources, which allows us to exploit detailed information on previous labour market history. We apply Coarsened Exact Matching to evaluate the WIJ’s impact on young unemployed people specifically in terms of their probability of being employed, unemployed or inactive, and of re-entering into education. Our results suggest that those who have participated in the WIJ programme have lower employment and education probabilities with respect to those who participated in the standard activities proposed by the public employment service. However, we found a positive employment effect if we only consider those who participated in the standard trajectory, i.e. those whose WIJ intervention lasted fewer than 14 months; this means that the negative effects are driven by those young individuals following the extended trajectories.     

Self-employment of immigrants and natives in Sweden – a multilevel analysis

Recent research suggests that self-employment among immigrants is due to a combination of multiple situational, cultural and institutional factors, all acting together. Using multilevel regression and unique data on the entire population of Sweden for the year 2007, this study attempts to quantify the relative importance for the self-employed of embeddedness in ethnic contexts (country of birth) and regional business and public regulatory frameworks (labour market areas). This information indicates whether the layers under consideration are valid constructs of the surroundings that influence individual self-employment. The results show that 10% (women) and 8% (men) of the total variation in individual differences in self-employment can be attributed to the country of birth. When labour market areas are included in the analyses, the share of the total variation increases to 14% for women and 12% for men. The results show that the ethnic context and the economic environment play a minor role in understanding individual differences in self-employment levels. The results can have important implications when planning interventions or other actions focusing on self-employment as public measures to promote self-employment often are based on geographic areas and ethnic contexts.     

Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales

High rates of self-employment among ethnic minorities in England and Wales are investigated using a framework in which the self-employment decision is influenced by ethnic-specific attributes as well as sectoral earnings differentials. As expected, differences in an individual's predicted earnings in paid and self-employment are strongly correlated with self-employment decisions. Individuals with low English fluency, and recent immigrants, are less likely than other members of ethnic minorities to be self-employed. Perhaps surprisingly, this is also true of individuals living in “enclaves” — areas with a high percentage of their own ethnic group. The relatively deprived nature of such areas of England and Wales may explain this.     

Immigrant self-employment in Sweden - its variation and some possible determinants

This paper examines self-employment among immigrants in Sweden. There are differences in the self-employment rate between immigrants and the native population and between different immigrant groups, both in the raw data and after controlling for variables such as age, gender, education and civil status. The study shows that non-Nordic immigrants in Sweden who arrived at an early date have higher self-employment rates than the native population. It seems as if self-employment among immigrants is to some extent positively correlated with time elapsed after arrival in the country. A number of possible explanations for the observed differences in self-employment between immigrants and natives and between different immigrant groups are presented in the study. Plausible explanations for the observed differences in self-employment rates are differences in traditions from the home country, differences in the labour market situation, and often a lack of knowledge among immigrants about the practical and formal matters an individual encounters when trying to establish a business.     

Ethnic group size,linguistic isolation,and immigrant entrepreneurship in the USA

Using a sample of immigrant men in US census data from the early and late 1900s and available in the Integrated Public Use Microdata Series (IPUMS), this study explores: (1) whether immigrant entrepreneurship is positively affected by ethnic group size and linguistic isolation; (2) how sensitive these relationships are to English-language proficiency; and (3) if these relationships have remained stable over time. The empirical results indicate that the size of the local ethnic population does not enhance immigrant self-employment for either English-proficient or limited-English-proficient (LEP) men in the USA. In addition, while linguistic isolation in the local labour pool seems to promote entrepreneurship among English-fluent immigrants in certain cases, it appears to hinder business formation among the LEP. Finally, comparing the results across time-periods is consistent with the premise that rising xenophobia pushes a disproportionate share of the LEP into self-employment.     

Transitions to self-employment at older ages: The role of wealth,health, health insurance and other factors

Relatively little research has been devoted to studying self-employment among older workers although they make up a disproportionate share of the self-employed workforce. This study uses 5 waves of panel data from the Health and Retirement Study to investigate the determinants of labor force transitions to self-employment at older ages. We estimate a multinomial logit model of transitions from wage and salary employment to self-employment, retirement or not working. Results are compared with those found in previous studies. New findings on the impact of health on transitions to self-employment are highlighted.     

Pushing the DEA research envelope

This brief article first investigates key dimensions underlying the progress realized by data envelopment analysis (DEA) methodologies. The resulting perspective is then used to encourage reflection on future paths for the field. Borrowing from the social sciences literature, we distinguish between problematization and gap identification in suggesting strategies to push the DEA research envelope. Emerging evidence of a declining number of influential methodological (theory)-based publications, and a flattening diffusion of applications imply an unfolding maturity of the field. Such findings suggest that focusing on known limitations of DEA, and/or of its applications, while searching for synergistic partnerships with other methodologies, can create new and fertile grounds for research. Possible future directions might thus include ‘DEA in practice’, ‘opening the black-box of production,’ ‘rationalizing inefficiency,’ and ‘the productivity dilemma.’ What we are therefore proposing is a strengthening of the methodology's contribution to fields of endeavor both including, and beyond, those considered in the past.     

Self-employment and job generation in metropolitan areas, 1969–2009

Many regional development policy initiatives assume that entrepreneurial activities promote economic growth. Empirical research has presented rationale for this argument showing that small firms create proportionally more new jobs than large firms. However, little research has been performed on the issue of net job generation at the urban level, particularly when self-employment is considered as an indicator of entrepreneurial activities. This paper investigates to what extent US metropolitan areas in the 1969–2009 period characterized by relatively high rates of self-employment also have shown relatively high rates of subsequent total employment growth. The analysis corrects for the influence of sectoral composition, wage level, educational attainment, presence of research universities and size of the metropolitan area to measure the extent to which the number and quality of self-employed in a region contribute to total employment growth. It finds the relationship between self-employment rates and subsequent total employment growth to be positive on average during the 40-year period but to weaken over time.