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The Effect of Relative Standing on Considerations about Self-Employment

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  • Stefan Schneck

Abstract

This paper uses unique German data to examine the effects of the relative standing on the individual propensity to become self-employed in the next two years. The results suggest that the relationship between relative wage positions and propensity to become self-employed is U-shaped. This is interpreted as evidence that low status translates into entrepreneurial motivation for workers in low relative wage positions. Employees with high relative standing, in turn, seem to be more concerned about the lack of future career prospects in paid employment and consider self-employment as a next step on the individual career ladder.

Suggested Citation

  • Stefan Schneck, 2011. "The Effect of Relative Standing on Considerations about Self-Employment," SOEPpapers on Multidisciplinary Panel Data Research 426, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp426
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    Cited by:

    1. Mathias Kloss & Thomas Kirschstein & Steffen Liebscher & Martin Petrick, 2019. "Robust Productivity Analysis: An application to German FADN data," Papers 1902.00678, arXiv.org, revised Feb 2019.
    2. Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.

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    More about this item

    Keywords

    Relative wage position; status; self-employment;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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