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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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  15. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  16. Bruno S. Frey & Matthias Benz, . "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," IEW - Working Papers 135, Institute for Empirical Research in Economics - University of Zurich.
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