Self-Employment out of Dissatisfaction: An International Study
AbstractThis paper studies differences in the rate of self-employment (business ownership) in more than twenty Western nations and Japan for the period 1974-1994, focusing in particular on the influences of dissatisfaction and uncertainty avoidance. We test two types of hypotheses, pertaining to the positive influence of various forms of dissatisfaction on the level of self-employment, and to differences between the importance of various push and pull factors in low and high uncertainty avoidance countries. The two types of hypotheses are related, as inhabitants of high-uncertainty avoidance cultures tend to express lower levels of satisfaction with life. Using a longitudinal dataset covering 12 European countries, and controlling for important economic factors, we find that dissatisfaction is a very important variable for explaining differences in self-employment levels. Dissatisfaction seems to be a factor promoting self-employment, not only at the level of the individual, but also at the level of societies. Hofstede's Uncertainty Avoidance Index is used to distinguish between low and high-uncertainty avoidance countries, and the factors influencing selfemployment rates within these two clusters are investigated in a set of 23 countries. In the group of high-uncertainty avoidance countries a strong negative relationship between GDP per capita and the level of self-employment is found, in low-uncertainty avoidance countries the profits associated with being self-employed are a significant factor. These findings, which support the hypotheses, suggest that in high-uncertainty avoidance countries self-employment is often caused by a lack of prosperity (a push factor); in low-uncertainty avoiding countries the pull factor of expected profits is more important.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-089/3.
Date of creation: 18 Nov 1999
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-02-10 (All new papers)
- NEP-ENT-2002-02-10 (Entrepreneurship)
- NEP-LAB-2002-02-10 (Labour Economics)
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