Why Does the Self-Employment Rate Vary Across Countries and Over Time?
AbstractThere is a tremendous diversity in the level and time-series pattern of the self-employment rate across countries. After documenting this fact with cross-section and time-series data on industrialized and lesser-developed countries, this paper presents and tests a series of hypotheses concerning the sources of this diversity. We show that the major explanation for this diversity is the stage of economic development. While the tendency for the self-employment rate to decline with economic development has long been recognized, this paper is the first attempt to estimate the statistical relationship between self-employment and economic development and to test an explanation for this relationship that is grounded in theory. We also show that the negative relationship between self-employment and economic development remains after controlling for a number of other factors. Although economic development is an extremely powerful force behind the secular decline in self-employment rates, the convergence of several factors in the 1970s tended to stem the secular decline in the self-employment rate for many countries. Of the 23 OECD countries we examined, 15 had increases in the self-employment rate during the 1970s or 1980s. It is likely, however, that these factors are temporary and that self-employment will continue its downwards trend as per-capita wealth increases in the developed and developing world.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 871.
Date of creation: Jan 1994
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.