Self-Employment and Windfall Gains in Britain: Evidence from Panel Data
AbstractLiquidity constraints can prohibit potential entrepreneurs from starting up in business, can restrict the growth of existing entrepreneurial activities and, in the extreme, can result in small business failure. This paper uses British panel data to investigate the effects of relaxing liquidity constraints on self-employment through the unanticipated receipt of windfall gains. It discusses the different impacts the receipt of a windfall payment may have on self-employment. The results suggest that the size of the payment received has a positive and concave effect on the probability of entering self-employment and on the performance of an existing self-employment enterprise, consistent with the liquidity constraint hypothesis. Copyright 2001 by The London School of Economics and Political Science
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Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 68 (2001)
Issue (Month): 272 (November)
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Other versions of this item:
- Taylor, Mark P, 1999. "Self-Employment and Windfall Gains in Britain: Evidence From Panel Data," CEPR Discussion Papers 2084, C.E.P.R. Discussion Papers.
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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