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By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World

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  • David Margolis

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment, and labor market institutions. However, self-employment in the developing world tends to be low productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes.

Suggested Citation

  • David Margolis, 2014. "By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01060265, HAL.
    • Handle: RePEc:hal:cesptp:hal-01060265
    DOI: 10.1057/ejdr.2014.25
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    More about this item

    Keywords

    self-employment; entrepreneurship; development;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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