IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/10780.html
   My bibliography  Save this paper

Why leave wage work and become self-employed ? Independence, earnings or unemployment

Author

Listed:
  • Tattara, Giuseppe
  • Volpe, Mario

Abstract

The paper addresses the problem of the relation between self-employment and employee status. The issue is whether self-employment is a form of disguised unemployment or a suitable long term form of employment towards which gravitate the most successful wage-workers: wage-workers attracted by an activity that is more independent and more apt to bring their personality to the foreground. The paper focuses on a detailed study of previous experience as an employee (entrance, duration, mobility, status, firm’s size) to evaluate this point. Individuals enter self-employment for the first time at a very young age, and the choice is the result of a period of high mobility, unemployment and inactivity after the first entrance into the labour market as an employee. Self-employment does not seem to be bound by a liquidity constraint or by the need to accumulate assets in order to start a viable businesses, the usual reasons brought about to explain deferred entry, or by the time necessary to discover a viable business opportunity: it is directly linked to movements in wage employment and represents a temporary solution to face an unattended negative shock.

Suggested Citation

  • Tattara, Giuseppe & Volpe, Mario, 1999. "Why leave wage work and become self-employed ? Independence, earnings or unemployment," MPRA Paper 10780, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10780
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/10780/1/MPRA_paper_10780.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Magnac, T. & Robin, J. -M., 1995. "An econometric analysis of labour market transitions using discrete and tenure data," Labour Economics, Elsevier, vol. 2(1), pages 106-106, March.
    2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    3. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    4. Andrew M. Yuengert, 1995. "Testing Hypotheses of Immigrant Self-Employment," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 194-204.
    5. Carroll, Glenn R. & Mosakowski, Elaine M., 1987. "The Career Dynamics of Self-Employment," Institute for Research on Labor and Employment, Working Paper Series qt13p1n10b, Institute of Industrial Relations, UC Berkeley.
    6. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amelie Constant & Yochanan Shachmurove, 2005. "The comparison of incomes of self-employed and salaried workers among German Nationals and immigrants," PIER Working Paper Archive 05-030, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    2. Dimo Dimov, 2010. "Nascent Entrepreneurs and Venture Emergence: Opportunity Confidence, Human Capital, and Early Planning," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1123-1153, September.
    3. John C. Dencker & Marc Gruber & Sonali K. Shah, 2009. "Pre-Entry Knowledge, Learning, and the Survival of New Firms," Organization Science, INFORMS, vol. 20(3), pages 516-537, June.
    4. Ira N. Gang & Catherine Y. Co & Myeong-Su Yun, 1999. "Switching Models with Self-Selection: Self-Employment in Hungary," Departmental Working Papers 199912, Rutgers University, Department of Economics.
    5. Charles Eesley, 2016. "Institutional Barriers to Growth: Entrepreneurship, Human Capital and Institutional Change," Organization Science, INFORMS, vol. 27(5), pages 1290-1306, October.
    6. Jan Wiers & Didier Chabaud, 2022. "Bibliometric analysis of immigrant entrepreneurship research 2009–2019," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 441-464, December.
    7. Baele, Lieven & Farooq, Moazzam & Ongena, Steven, 2014. "Of religion and redemption: Evidence from default on Islamic loans," Journal of Banking & Finance, Elsevier, vol. 44(C), pages 141-159.
    8. Mar, Don, 2005. "Individual characteristics vs. city structural characteristics: explaining self-employment differences among Chinese, Japanese, and Filipinos in the United States," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 341-359, May.
    9. Fredriksen, Lars & Wennberg, Karl & Balachandran, Chanchal, 2015. "Mobility and Entrepreneurship: Evaluating the scope of knowledge-based theories of entrepreneurship," Ratio Working Papers 266, The Ratio Institute.
    10. Julie Hotchkiss, 1999. "The effect of transitional employment on search duration: A selectivity approach," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(1), pages 38-52, March.
    11. Francisco J. Gil & Maria Jesus Martin & Angel Serrat, 1994. "Movilidad en el mercado de trabajo en España: un análisis econométrico de duración con riesgos en competencia," Investigaciones Economicas, Fundación SEPI, vol. 18(3), pages 517-537, September.
    12. Giuliano Guerra & Roberto Patuelli, 2014. "The influence of role models on immigrant self-employment: a spatial analysis for Switzerland," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(1/2), pages 187-215, May.
    13. Marcén, Miriam, 2013. "The effect of culture on self-employment," MPRA Paper 47338, University Library of Munich, Germany.
    14. Thomas Leoni & Martin Falk, 2010. "Gender and field of study as determinants of self-employment," Small Business Economics, Springer, vol. 34(2), pages 167-185, February.
    15. Henley, Andrew, 2009. "Switching Costs and Occupational Transition into Self-Employment," IZA Discussion Papers 3969, Institute of Labor Economics (IZA).
    16. Dong, Diansheng & Stewart, Hayden & McLaughlin, Patrick W., 2017. "A New Approach for Modeling Household Food Demand with Panel Data: The Case of Cold Cereals," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258195, Agricultural and Applied Economics Association.
    17. Maloney, William F., 1998. "Are labor markets in developing countries dualistic?," Policy Research Working Paper Series 1941, The World Bank.
    18. Gabriel Jiménez & Steven Ongena & José‐Luis Peydró & Jesús Saurina, 2014. "Hazardous Times for Monetary Policy: What Do Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk‐Taking?," Econometrica, Econometric Society, vol. 82(2), pages 463-505, March.
    19. Baele, L. & Farooq, M. & Ongena, S., 2012. "Of Religion and Redemption : Evidence from Default on Islamic Loans (Replaces CentER DP 2010-136)," Discussion Paper 2012-014, Tilburg University, Center for Economic Research.
    20. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.

    More about this item

    Keywords

    Unemployment; Self-emeplyment; Transitions in the Labour Market;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:10780. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.