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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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    Citations

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    Cited by:

    1. Nyoni, Thabani, 2018. "Switching from Job Seekers to Job Creators: Transmogrifying Necessity Entrepreneurs and Ratifying Opportunity Entrepreneurs in Zimbabwe," MPRA Paper 88840, University Library of Munich, Germany.
    2. World Bank, 2016. "Republic of the Philippines Labor Market Review," World Bank Other Operational Studies 24768, The World Bank.
    3. Bobba, Matteo & Flabbi, Luca & Levy Algazi, Santiago, 2017. "Labor Market Search, Informality and Schooling Investments," IZA Discussion Papers 11170, Institute for the Study of Labor (IZA).
    4. repec:eee:jobuve:v:9:y:2018:i:c:p:128-136 is not listed on IDEAS
    5. José Ernesto Amorós Espinosa & Luciano Ciravegna & Vesna Mandakovic & Pekka Stenmolm, 2017. "Necessity or opportunity? the effects of State fragility and economic development on entrepreneurial efforts," Serie Working Papers 42, Universidad del Desarrollo, School of Business and Economics.
    6. repec:gam:jsusta:v:10:y:2018:i:8:p:2594-:d:159651 is not listed on IDEAS
    7. Olabimtan Adebowale and David Lawson, 2018. "Does access to formal finance matter for stimulating entrepreneurship in developing countries? Evidence from non-farm entrepreneurial activities in Nigeria," Global Development Institute Working Paper Series 262018, GDI, The University of Manchester.
    8. Faress Bhuiyan, Muhammad & Ivlevs, Artjoms, 2018. "Micro-Entrepreneurship and Subjective Well-Being: Evidence from Rural Bangladesh," IZA Discussion Papers 11819, Institute for the Study of Labor (IZA).
    9. repec:eee:ecolet:v:160:y:2017:i:c:p:7-11 is not listed on IDEAS
    10. repec:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9916-0 is not listed on IDEAS
    11. World Bank & International Energy Agency, "undated". "Sustainable Energy for All 2015," World Bank Other Operational Studies 22148, The World Bank.

    More about this item

    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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