The Impact on Earnings When Entering Self-Employment: Evidence for Germany
AbstractUsing data of the German Socio-Economic Panel (GSOEP) earnings differentials between self-employed and wage-employed workers in the German labor market are explored. Previous research based on US data reports lower incomes for entrepreneurs. In contrast to that, the findings of this contribution suggest the opposite for German entrepreneurs. They have considerably higher earnings than wage-employed workers. Furthermore, there is a significant and positive effect on earnings when entering self-employment. This holds true when it is also taken into account that workers usually report a smaller firm size and work longer after beginning an entrepreneurial occupation.
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Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 537.
Length: 36 p.
Date of creation: 2013
Date of revision:
Self-employment; Human Capital; Earnings; GSOEP; Entrepreneurship;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-ENT-2013-03-02 (Entrepreneurship)
- NEP-EUR-2013-03-02 (Microeconomic European Issues)
- NEP-HRM-2013-03-02 (Human Capital & Human Resource Management)
- NEP-LAB-2013-03-02 (Labour Economics)
- NEP-LMA-2013-03-02 (Labor Markets - Supply, Demand, & Wages)
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