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A Longitudinal Analysis of Young Entrepreneurs in Australia and the United States

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  • David G. Blanchflower
  • Bruce D. Meyer

Abstract

This paper examines the pattern of self-employment in Australia and the United States. We particularly focus on the movement of young people in and out of self-employment using comparable longitudinal data from the two countries. We find that the forces that influence whether a person becomes self-employed are broadly similar: in both countries skilled manual workers, males and older workers were particularly likely to move to self-employment. We also find that previous firm size, previous union status and previous earnings are important determinants of transitions to self-employment. The main difference we observe is that additional years of schooling had a positive impact on the probability of being self-employed in the US but were not a significant influence in Australia. However, the factors influencing the probability of leaving self-employment are different across the two countries. The only similarity is that in both countries younger individuals are more likely to leave.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3746.

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Date of creation: Jun 1991
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Publication status: published as Small Business Economics, Jan 1994, pp. 1-19 (vol. 6, No. 1).
Handle: RePEc:nbr:nberwo:3746

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  1. Blanchflower, David G. & Oswald, Andrew J., 2007. "What Makes a Young Entrepreneur?," IZA Discussion Papers 3139, Institute for the Study of Labor (IZA).
  2. Moore, Robert L, 1983. "Employer Discrimination: Evidence from Self-Employed Workers," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 496-501, August.
  3. Gene M. Grossman, 1983. "International Trade, Foreign Investment, and the Formation of the Entrepreneurial Class," NBER Working Papers 1174, National Bureau of Economic Research, Inc.
  4. Marc Bendick & Jr & Mary L. Egan, 1987. "Transfer payment diversion for small business development: British and French experience," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(4), pages 528-542, July.
  5. Lazear, Edward P & Moore, Robert L, 1984. "Incentives, Productivity, and Labor Contracts," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 99(2), pages 275-96, May.
  6. 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, University of Chicago Press, vol. 87(4), pages 719-48, August.
  7. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
  8. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
  9. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(4), pages 808-27, August.
  10. Kanbur, S M Ravi, 1982. "Entrepreneurial Risk Taking, Inequality, and Public Policy: An Application of Inequality Decomposition Analysis to the General Equilibrium Effects of Progressive Taxation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(1), pages 1-21, February.
  11. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
  12. Victor R. Fuchs, 1982. "Self-Employment and Labor Force Participation of Older Males," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 339-357.
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Cited by:
  1. Santarelli, Enrico & Vivarelli, Marco, 2006. "Entrepreneurship and the Process of Firms’ Entry, Survival and Growth," IZA Discussion Papers 2475, Institute for the Study of Labor (IZA).
  2. Lechner, Michael & Pfeiffer, Friedhelm, 1993. " Planning for Self-Employment at the Beginning of a Market Economy: Evidence from Individual Data of East German Workers," Small Business Economics, Springer, vol. 5(2), pages 111-28, June.
  3. repec:fth:prinin:299 is not listed on IDEAS
  4. Allan Kearns & Frances Ruane, 1998. "The Post-Entry Performance of Irish Plants: Does a plant's Technological Activity Matter?," Economics Technical Papers, Trinity College Dublin, Department of Economics 9820, Trinity College Dublin, Department of Economics.
  5. Nerlinger, Eric A., 1996. "Firm formation in high-tech industries: empirical results for Germany," ZEW Discussion Papers 96-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Leitão, João & Franco, Mário, 2008. "Individual Entrepreneurship Capacity and Performance of SMEs," MPRA Paper 8179, University Library of Munich, Germany, revised 09 Apr 2008.
  7. Marco Vivarelli, 2011. "Baumol, W.J.: The microtheory of innovative entrepreneurship," Journal of Economics, Springer, vol. 103(2), pages 199-202, June.
  8. David Blanchflower & Andrew Oswald, 1992. "Entrepreneurship, Happiness and Supernormal Returns: Evidence from Britain and the US," NBER Working Papers 4228, National Bureau of Economic Research, Inc.

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