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The Role Of Dissatisfaction And Per Capita Income In Explaining Self-Employment Across 15 European Countries

  • Sander Wennekers

    ()

  • Andre van Stel

    ()

  • Niels Noorderhaven

    ()

  • Roy Thurik

    ()

This paper deals with explaining the sizable differences in the rate of self-employment (business ownership) across 15 European countries in the period 1978-2000, within a framework of occupational choice, focusing on the influence of dissatisfaction and of per capita income. Using two different measures of dissatisfaction, in addition to the level of economic development and controlling for several other variables, we find that, in addition to a negative and significant impact of per capita income, dissatisfaction at the level of societies has a positive and significant influence on self-employment levels. Both dissatisfaction with life and dissatisfaction with the way democracy works are found to influence self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative 'displacements' known to promote self-employment. The findings indirectly point at the potential importance of push factors within the incentive structures of modern economies.

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Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2004-11.

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Length: 21 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:esi:egpdis:2004-11
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  2. de Wit, Gerrit, 1993. " Models of Self-Employment in a Competitive Market," Journal of Economic Surveys, Wiley Blackwell, vol. 7(4), pages 367-97, December.
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  18. Foti, Alessandro & Vivarelli, Marco, 1994. " An Econometric Test of the Self-Employment Model: The Case of Italy," Small Business Economics, Springer, vol. 6(2), pages 81-93, April.
  19. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1990. "The Allocation of Talent: Implicationsfor Growth," University of Chicago - George G. Stigler Center for Study of Economy and State 65, Chicago - Center for Study of Economy and State.
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