Transition out of self-employment – evidence from Poland

Purpose - The purpose of this paper is to address the issue of self-employment exit in Poland and its determinants. Design/methodology/approach - The author examines the outflow from self-employment into different labour market status: employment, unemployment, inactivity using multinomial logistic regression. The analysis is conducted separately for men and women using Polish Labour Force Surveys (LFS) (2001-2007). Findings - Results indicate that personal and family characteristics have different impact on self-employment exit for men and women. However, unfavourable macroeconomic conditions have similar impact regardless gender. The author’s results show that higher local unemployment rate reduces the likelihood of self-employment exit into employment, while conducting business in a sector affected by economic downturn increase outflow from self-employment for both men and women. Research limitations/implications - Certain limitations of the study arise from the design of the Polish LFS. It is a rotating panel with relatively few time periods, so it can only allow the author to analyse the outcomes in short-term perspectives. Practical implications - Those results provide some background for potential policy interventions. In the context of persistent, high unemployment rates in Poland, there is need for some policy incentives which reinforce self-employment – an important alternative form of the labour market participation. Originality/value - Majority of previous studies focusses on self-employment creation, as policy incentives do. However, very little is known about the reasons for leaving self-employment. The author fills this gap analysing the outflow and transition from self-employment to different labour market status.