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Transitions to and From Self‐employment in Spain: An Empirical Analysis

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  • Raquel Carrasco

Abstract

This paper investigates the influence of individual characteristics and the business cycle on the probability of entry into self‐employment and on self‐employment duration. We estimate multinomial logit and discrete competing risks models using data from a longitudinal sample of Spanish men for the period 1985–1991. The results indicate that unemployment raises the probability of entering self‐employment, but also increases the hazard of leaving self‐employment, especially into unemployment. Moreover, receiving unemployment benefits significantly reduces the probability of entering self‐employment. Liquidity constraints are important in determining enterpreneurial selection, but only for those who become self‐employed with employees.

Suggested Citation

  • Raquel Carrasco, 1999. "Transitions to and From Self‐employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-341, August.
    • Handle: RePEc:bla:obuest:v:61:y:1999:i:3:p:315-341
    DOI: 10.1111/1468-0084.00132
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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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