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Self-Employment out of Dissatisfaction: An International Study

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  • Niels G. Noorderhaven

    (Tilburg University)

  • Sander Wennekers

    (EIM, Zoetermeer)

  • Geert Hofstede

    (EIM, Zoetermeer)

  • A. Roy Thurik

    (Erasmus University Rotterdam)

  • Ralph E. Wildeman

    (Tilburg University)

Abstract

This paper studies differences in the rate of self-employment (business ownership) in more thantwenty Western nations and Japan for the period 1974-1994, focusing in particular on theinfluences of dissatisfaction and uncertainty avoidance. We test two types of hypotheses, pertainingto the positive influence of various forms of dissatisfaction on the level of self-employment, and todifferences between the importance of various push and pull factors in low and high uncertaintyavoidance countries. The two types of hypotheses are related, as inhabitants of high-uncertaintyavoidance cultures tend to express lower levels of satisfaction with life. Using a longitudinaldataset covering 12 European countries, and controlling for important economic factors, we findthat dissatisfaction is a very important variable for explaining differences in self-employmentlevels. Dissatisfaction seems to be a factor promoting self-employment, not only at the level of theindividual, but also at the level of societies. Hofstede's Uncertainty Avoidance Index is used todistinguish between low and high-uncertainty avoidance countries, and the factors influencingselfemployment rates within these two clusters are investigated in a set of 23 countries. In the group ofhigh-uncertainty avoidance countries a strong negative relationship between GDP per capita andthe level of self-employment is found, in low-uncertainty avoidance countries the profits associatedwith 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 ofprosperity (a push factor); in low-uncertainty avoiding countries the pull factor of expected profitsis more important.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-089/3.

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Date of creation: 18 Nov 1999
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Handle: RePEc:dgr:uvatin:19990089

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Web page: http://www.tinbergen.nl

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  1. Schultz, T. Paul, 1989. "Women's changing participation in the labor force : a world perspective," Policy Research Working Paper Series 272, The World Bank.
  2. Wildeman, R.E & Hofstede, G. & Noorderhaven, N.G. & Thurik, A.R. & Verhorven, W.H.J. & Wennekers, A.R.M., 1998. "Self-Employment in 23 OECD Countries," Papers 9811/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
  3. Shane, Scott, 1993. "Cultural influences on national rates of innovation," Journal of Business Venturing, Elsevier, vol. 8(1), pages 59-73, January.
  4. Acemoglu, Daron, 1995. "Reward structures and the allocation of talent," European Economic Review, Elsevier, vol. 39(1), pages 17-33, January.
  5. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  6. Carree, M. & van Stel, A. & Thurik, R. & Wennekers, S., 1998. "Business Ownership and Economic Growth: an Empirical Investigation," Papers 9809/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
  7. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
  8. Birley, Sue & Westhead, Paul, 1994. "A taxonomy of business start-up reasons and their impact on firm growth and size," Journal of Business Venturing, Elsevier, vol. 9(1), pages 7-31, January.
  9. Blanchflower, David G & Meyer, Bruce D, 1994. " A Longitudinal Analysis of the Young Self-Employed in Australia and the United States," Small Business Economics, Springer, vol. 6(1), pages 1-19, February.
  10. Audretsch, D.B. & Thurik, A.R., 1998. "The Knowledge Society, Entrepreneurship and Unemployment," Papers 9801/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
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