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A Longitudinal Analysis of Young Entrepreneurs in Australia and the United States

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  • David Blanchflower
  • B Meyer

Abstract

This paper examines the pattern of self-employment in Australia and the United States. We particularly focus on the movement of young people in and out of self-employment using comparable longitudinal data from the two countries. We find that the forces that influence whether a person becomes self-employed are broadly similar: in both countries skilled manual workers, males and older workers were particularly likely to move to self-employment. We also find that previous firm size, previous union status and previous earnings are important determinants if transition to self-employment. The main difference we observe is that additional years of schooling had a positive impact on the probability of being self-employed in the US but were not a significant influence in Australia. However, the factors influencing the probability of leaving self-employment are different across the two countries. The only similarity is that in both countries younger individuals are more likely to leave.

Suggested Citation

  • David Blanchflower & B Meyer, 1991. "A Longitudinal Analysis of Young Entrepreneurs in Australia and the United States," CEP Discussion Papers dp0055, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0055
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    References listed on IDEAS

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    1. Grossman, Gene M, 1984. "International Trade, Foreign Investment, and the Formation of the Entrepreneurial Class," American Economic Review, American Economic Association, vol. 74(4), pages 605-614, September.
    2. Moore, Robert L, 1983. "Employer Discrimination: Evidence from Self-Employed Workers," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 496-501, August.
    3. Blanchflower, D. & Oswald, A., 1990. "What Makes A Young Entrepreneur?," Papers 373, London School of Economics - Centre for Labour Economics.
    4. Victor R. Fuchs, 1982. "Self-Employment and Labor Force Participation of Older Males," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 339-357.
    5. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    6. Edward P. Lazear & Robert L. Moore, 1984. "Incentives, Productivity, and Labor Contracts," The Quarterly Journal of Economics, Oxford University Press, vol. 99(2), pages 275-296.
    7. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," Journal of Human Resources, University of Wisconsin Press, vol. 21(4), pages 485-506.
    8. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
    9. Kanbur, S M Ravi, 1982. "Entrepreneurial Risk Taking, Inequality, and Public Policy: An Application of Inequality Decomposition Analysis to the General Equilibrium Effects of Progressive Taxation," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 1-21, February.
    10. Marc Bendick Jr. & Mary Lou Egan, 1987. "Transfer Payment Diversion for Small Business Development: British and French Experience," ILR Review, Cornell University, ILR School, vol. 40(4), pages 528-542, July.
    11. Bruce D. Meyer, 1990. "Why Are There So Few Black Entrepreneurs?," NBER Working Papers 3537, National Bureau of Economic Research, Inc.
    12. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
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    Cited by:

    1. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 455-488, June.
    2. Allan Kearns & Frances Ruane, 1998. "The Post-Entry Performance of Irish Plants: Does a plant's Technological Activity Matter?," Economics Technical Papers 9820, Trinity College Dublin, Department of Economics.
    3. Lechner, Michael & Pfeiffer, Friedhelm, 1993. "Planning for Self-Employment at the Beginning of a Market Economy: Evidence from Individual Data of East German Workers," Small Business Economics, Springer, vol. 5(2), pages 111-128, June.
    4. Paul Westhead & David J. Storey & Frank Martin, 2001. "Outcomes reported by students who participated in the 1994 Shell Technology Enterprise Programme," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(2), pages 163-185, April.
    5. David Blanchflower & Andrew Oswald, 1992. "Entrepreneurship, Happiness and Supernormal Returns: Evidence from Britain and the US," NBER Working Papers 4228, National Bureau of Economic Research, Inc.
    6. Marco Vivarelli, 2011. "Baumol, W.J.: The microtheory of innovative entrepreneurship," Journal of Economics, Springer, vol. 103(2), pages 199-202, June.
    7. Nerlinger, Eric A., 1996. "Firm formation in high-tech industries: empirical results for Germany," ZEW Discussion Papers 96-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Leitão, João & Franco, Mário, 2008. "Individual Entrepreneurship Capacity and Performance of SMEs," MPRA Paper 8179, University Library of Munich, Germany, revised 09 Apr 2008.
    9. Julie Elston & David Audretsch, 2011. "Financing the entrepreneurial decision: an empirical approach using experimental data on risk attitudes," Small Business Economics, Springer, vol. 36(2), pages 209-222, February.

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