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By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World

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  • David N Margolis

    (1] Paris School of Economics-CNRS, Centre d’économie de la Sorbonne, Paris, France.[2] IZA, Bonn, Germany.)

Abstract

Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two-thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment and labor market institutions. However, self-employment in the developing world tends to be low-productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes.

Suggested Citation

  • David N Margolis, 2014. "By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 26(4), pages 419-436, September.
    • Handle: RePEc:pal:eurjdr:v:26:y:2014:i:4:p:419-436
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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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