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The Dynamics of Solo Self-Employment: Persistence and Transition to Employership

Author

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  • Daniel S. J. Lechmann
  • Christoph Wunder

Abstract

This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo selfemployment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.

Suggested Citation

  • Daniel S. J. Lechmann & Christoph Wunder, 2017. "The Dynamics of Solo Self-Employment: Persistence and Transition to Employership," SOEPpapers on Multidisciplinary Panel Data Research 932, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp932
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.566900.de/diw_sp0932.pdf
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    References listed on IDEAS

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    Cited by:

    1. Schneck, Stefan, 2018. "The effect of self-employment on income inequality," Working Papers 05/18, Institut für Mittelstandsforschung (IfM) Bonn.

    More about this item

    Keywords

    state dependence; dynamic multinomial logit; solo self-employment; own-account worker; stepping stone; German SOEP;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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