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Self-employment and the predicted earnings differential - evidence from Finland

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  • Edvard Johansson

    (Department of Economics, Swedish School of Economics and Business Administration, Finland)

Abstract

Using a large Finnish data set, the choice between self-employment and paidemployment is analysed empirically. The model used is a switching regression model with endogenous switching. The main result suggests that the predicted earnings differential between self-employment and paid employment has a positive influence on the probability of being self-employed.

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Bibliographic Info

Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

Volume (Year): 13 (2000)
Issue (Month): 1 (Spring)
Pages: 45-55

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Handle: RePEc:fep:journl:v:13:y:2000:i:1:p:45-55

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Web page: http://www.taloustieteellinenyhdistys.fi
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References

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  1. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages S7-36, October.
  2. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  3. Dolton, Peter J & Makepeace, G H, 1990. "Self Employment among Graduates," Bulletin of Economic Research, Wiley Blackwell, vol. 42(1), pages 35-53, January.
  4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  5. de Wit, Gerrit, 1993. " Models of Self-Employment in a Competitive Market," Journal of Economic Surveys, Wiley Blackwell, vol. 7(4), pages 367-97, December.
  6. Fujii, Edwin T. & Hawley, Clifford B., 1991. "Empirical aspects of self-employment," Economics Letters, Elsevier, vol. 36(3), pages 323-329, July.
  7. Acs, Zoltán J & Audretsch, David B & Evans, David S, 1994. "Why Does the Self-Employment Rate Vary Across Countries and Over Time?," CEPR Discussion Papers 871, C.E.P.R. Discussion Papers.
  8. De Wit, G. & Winden, F., 1989. "An Empirical Analysis Of Self-Employment In The Netherlands," Papers 89.02, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
  9. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
  10. Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
  11. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-34, July-Sept.
  12. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-66, May.
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Citations

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Cited by:
  1. Roope Uusitalo, 1999. "Homo Entreprenaurus?," Discussion Papers 205, Government Institute for Economic Research Finland (VATT).
  2. Svaleryd, Helena, 2013. "Self-employment and the local business cycle," Working Paper Series 2013:15, Uppsala University, Department of Economics.
  3. Carolina Castagnetti & Luisa Rosti, 2009. "Who skims the cream of the Italian graduate crop? Wage-employment versus self-employment," Quaderni di Dipartimento 089, University of Pavia, Department of Economics and Quantitative Methods.
  4. Williams, Donald R., 2012. "Gender discrimination and self-employment dynamics in Europe," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 153-158.
  5. Carolina Castagnetti & Luisa Rosti, 2010. "The Gender Gap in Academic Achievements of Italian Graduates," Quaderni di Dipartimento 118, University of Pavia, Department of Economics and Quantitative Methods.
  6. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," IZA Discussion Papers 2818, Institute for the Study of Labor (IZA).
  7. Castagnetti, Carolina & Rosti, Luisa, 2007. "Effort allocation in tournaments: the effect of gender on academic performance in Italian universities," MPRA Paper 13441, University Library of Munich, Germany, revised 30 Jun 2008.
  8. Andersson Joona, Pernilla & Wadensjö, Eskil, 2006. "Employees Who Become Self-Employed: Do Labour Income and Wages Have an Impact?," IZA Discussion Papers 1971, Institute for the Study of Labor (IZA).
  9. Millán, José María & Congregado, Emilio & Román, Concepción, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
  10. Anu Tokila & Hannu Tervo, 2011. "Regional differences in returns to education for entrepreneurs versus wage earners," The Annals of Regional Science, Springer, vol. 47(3), pages 689-710, December.
  11. Jing Chen, 2008. "Wealth Constraints and Self-Employment: Evidence from Birth Order," Working Papers 0808, Florida International University, Department of Economics.
  12. Ekelund, Jesper & Johansson, Edvard & Jarvelin, Marjo-Riitta & Lichtermann, Dirk, 2005. "Self-employment and risk aversion--evidence from psychological test data," Labour Economics, Elsevier, vol. 12(5), pages 649-659, October.
  13. Johannes Martin, 2013. "The Impact on Earnings When Entering Self-Employment: Evidence for Germany," SOEPpapers on Multidisciplinary Panel Data Research 537, DIW Berlin, The German Socio-Economic Panel (SOEP).
  14. Edvard Johansson, 2005. "An estimate of self-employment income underreporting in Finland," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 99-109.
  15. Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.
  16. Hannu Tervo & Mika Haapanen, 2006. "Gender Differences in Self-Employment in Finnish Regions," ERSA conference papers ersa06p380, European Regional Science Association.

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