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Self-Employment Dynamics, State Dependence and Cross-Mobility Patterns

Author

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  • Marco Caliendo
  • Arne Uhlendorff

Abstract

This paper analyzes the mobility between self-employment, wage employment and non-employment. Using data for men in West Germany, we find strong true state dependence in all three states. Moreover, compared to wage employment, non-employment increases the probability of self-employment significantly, and selfemployment goes along with a higher risk of future non-employment.

Suggested Citation

  • Marco Caliendo & Arne Uhlendorff, 2008. "Self-Employment Dynamics, State Dependence and Cross-Mobility Patterns," SOEPpapers on Multidisciplinary Panel Data Research 152, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp152
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    References listed on IDEAS

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    1. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
    2. 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.
    3. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    4. Cressy, Robert, 2000. "Credit rationing or entrepreneurial risk aversion? An alternative explanation for the Evans and Jovanovic finding," Economics Letters, Elsevier, vol. 66(2), pages 235-240, February.
    5. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    6. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    7. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-266, May.
    8. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September.
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    Citations

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    Cited by:

    1. Taylor, Mark P., 2011. "Self-employment flows and persistence: a European comparative analysis," ISER Working Paper Series 2011-26, Institute for Social and Economic Research.
    2. Schanne, Norbert & Weyh, Antje, 2009. "What makes start-ups out of unemployment different?," IAB Discussion Paper 200904, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. repec:bla:ecorec:v:93:y:2017:i::p:144-170 is not listed on IDEAS
    4. Christoph Wunder & Regina T. Riphahn, 2014. "The dynamics of welfare entry and exit amongst natives and immigrants," Oxford Economic Papers, Oxford University Press, vol. 66(2), pages 580-604.
    5. Melanie Ward-Warmedinger & Corrado Macchiarelli, 2014. "Transitions in labour market status in EU labour markets," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.
    6. Zucchelli, E. & Harris, M. & Zhao, X., 2012. "Ill-health and transitions to part-time work and self-employment among older workers," Health, Econometrics and Data Group (HEDG) Working Papers 12/04, HEDG, c/o Department of Economics, University of York.
    7. Roy Thurik, 2014. "Entrepreneurship and the business cycle," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-90, October.
    8. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    9. Melanie Ward-Warmedinger & Corrado Macchiarelli, 2013. "Transitions in labour market status in the European Union," LEQS – LSE 'Europe in Question' Discussion Paper Series 69, European Institute, LSE.
    10. Melanie Ward-Warmedinger & Corrado Macchiarelli, 2014. "Transitions in labour market status in EU labour markets," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-25, December.

    More about this item

    Keywords

    Self-Employment; State Dependence; Labor Market Dynamics; Unemployment;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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