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The Effect of Relative Standing on Considerations about Self-Employment

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  • Stefan Schneck

Abstract

This paper uses unique German data to examine the effects of the relative standing on the individual propensity to become self-employed in the next two years. The results suggest that the relationship between relative wage positions and propensity to become self-employed is U-shaped. This is interpreted as evidence that low status translates into entrepreneurial motivation for workers in low relative wage positions. Employees with high relative standing, in turn, seem to be more concerned about the lack of future career prospects in paid employment and consider self-employment as a next step on the individual career ladder.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.391496.de/diw_sp0426.pdf
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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 426.

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Length: 37 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp426

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Keywords: Relative wage position; status; self-employment;

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References

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  1. Boden, Richard Jr., 1996. "Gender and self-employment selection: An empirical assessment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 25(6), pages 671-682.
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  14. Christian Pfeifer, 2010. "Impact of wages and job levels on worker absenteeism," International Journal of Manpower, Emerald Group Publishing, Emerald Group Publishing, vol. 31(1), pages 59-72, May.
  15. Manoj Atolia & Kislaya Prasad, 2007. "Relative Wealth Concerns and Entrepreneurship," Working Papers, Department of Economics, Florida State University wp2008_11_02, Department of Economics, Florida State University, revised Oct 2008.
  16. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(3), pages 604-631, June.
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Cited by:
  1. 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, Springer, vol. 43(1), pages 137-160, June.

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