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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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• J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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.
   
   • Robert J. Willis & Sherwin Rosen, 1978. "Education and Self-Selection," NBER Working Papers 0249, National Bureau of Economic Research, Inc.
2. 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.
3. De Wit, Gerrit & Van Winden, Frans A. A. M., 1990. "An empirical analysis of self-employment in the Netherlands," Economics Letters, Elsevier, vol. 32(1), pages 97-100, January.
   
   • 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.
4. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
   
   • Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
5. Fujii, Edwin T. & Hawley, Clifford B., 1991. "Empirical aspects of self-employment," Economics Letters, Elsevier, vol. 36(3), pages 323-329, July.
6. 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.
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. Dolton, Peter J & Makepeace, G H, 1990. "Self Employment among Graduates," Bulletin of Economic Research, Wiley Blackwell, vol. 42(1), pages 35-53, January.
9. 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.
   
   • Taylor, Mark P., 1994. "Earnings, independence or unemployment: why become self -employed?," ISER Working Paper Series 26, Institute for Social and Economic Research.
10. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
11. 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.
12. Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.

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Cited by:

1. 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.
   
   • Carolina Castagnetti & Luisa Rosti, 2011. "Who skims the cream of the Italian graduate crop? Wage employment versus self-employment," Small Business Economics, Springer, vol. 36(2), pages 223-234, February.
   • Castagnetti, Carolina & Rosti, Luisa, 2008. "Who skims the cream of the Italian graduate crop? Wage-employment versus self-employment," MPRA Paper 13504, University Library of Munich, Germany.
2. 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).
3. 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.
   
   • Castagnetti, Carolina & Rosti, Luisa, 2009. "Effort allocation in tournaments: The effect of gender on academic performance in Italian universities," Economics of Education Review, Elsevier, vol. 28(3), pages 357-369, June.
4. Roope Uusitalo, 1999. "Homo Entreprenaurus?," Discussion Papers 205, Government Institute for Economic Research Finland (VATT).
   
   • Roope Uusitalo, 2001. "Homo entreprenaurus?," Applied Economics, Taylor and Francis Journals, vol. 33(13), pages 1631-1638.
5. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," IZA Discussion Papers 2818, Institute for the Study of Labor (IZA).
6. 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).
7. 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.
8. Jing Chen, 2008. "Wealth Constraints and Self-Employment: Evidence from Birth Order," Working Papers 0808, Florida International University, Department of Economics.
9. 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.
10. Y Georgellis & J G Sessions & N Tsitsianis, 2005. "Self-Employment Longitudinal Dynamics: A Review of the Literature," Economic Issues Journal Articles, Economic Issues, vol. 10(2), pages 51-84, September.
11. Hannu Tervo & Mika Haapanen, 2006. "Gender Differences in Self-Employment in Finnish Regions," ERSA conference papers ersa06p380, European Regional Science Association.
12. 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.

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