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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 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," PSE - Labex "OSE-Ouvrir la Science Economique" hal-01060265, HAL.
  • Handle: RePEc:hal:pseose:hal-01060265
    DOI: 10.1057/ejdr.2014.25
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01060265
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World
      by maximorossi in NEP-LTV blog on 2015-06-10 17:38:56

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    Cited by:

    1. Nyoni, Thabani, 2018. "Switching from Job Seekers to Job Creators: Transmogrifying Necessity Entrepreneurs and Ratifying Opportunity Entrepreneurs in Zimbabwe," MPRA Paper 88840, University Library of Munich, Germany.
    2. World Bank, 2016. "Republic of the Philippines Labor Market Review," World Bank Other Operational Studies 24768, The World Bank.
    3. Wolfe, Marcus T. & Patel, Pankaj C., 2019. "Exploring the differences in perceptions of work importance and job usefulness to society between self-employed and employed individuals," Journal of Business Venturing Insights, Elsevier, vol. 12(C).
    4. Lucas Ronconi & Ravi Kanbur & Santiago López-Cariboni, 2019. "Who demands labour (de)regulation in the developing world?: Insider-outsider theory revisited," WIDER Working Paper Series wp-2019-90, World Institute for Development Economic Research (UNU-WIDER).
    5. Ahunov, Muzaffar & Yusupov, Nurmukhammad, 2017. "Risk attitudes and entrepreneurial motivations: Evidence from transition economies," Economics Letters, Elsevier, vol. 160(C), pages 7-11.
    6. José Ernesto Amorós Espinosa & Luciano Ciravegna & Vesna Mandakovic & Pekka Stenmolm, 2017. "Necessity or opportunity? the effects of State fragility and economic development on entrepreneurial efforts," Serie Working Papers 42, Universidad del Desarrollo, School of Business and Economics.
    7. Bobba, Matteo & Flabbi, Luca & Levy, Santiago, 2017. "Labor Market Search, Informality and Schooling Investments," TSE Working Papers 17-867, Toulouse School of Economics (TSE), revised Sep 2018.
    8. Ralitza Dimova & Kevwe Pela, 2018. "Entrepreneurship: structural transformation, skills and constraints," Small Business Economics, Springer, vol. 51(1), pages 203-220, June.
    9. Fabian Scholtes & Daniel Neff & Florian Lampe, 2018. "The Role And Sources Of Agency And Self-Employment Over The Life Course: Micro-Entrepreneurs In Kampala, Uganda," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(04), pages 1-21, December.
    10. Bhuiyan, Muhammad Faress & Ivlevs, Artjoms, 2019. "Micro-entrepreneurship and subjective well-being: Evidence from rural Bangladesh," Journal of Business Venturing, Elsevier, vol. 34(4), pages 625-645.
    11. Christopher J. Boudreaux & Boris Nikolaev, 2019. "Capital is not enough: opportunity entrepreneurship and formal institutions," Small Business Economics, Springer, vol. 53(3), pages 709-738, October.
    12. Joshua Wassink, 2018. "Is Local Social Development Associated with Workforce Composition? A Municipal Analysis of Mexico, 1990–2015," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 37(6), pages 941-966, December.
    13. Reid, Shane W. & Patel, Pankaj C. & Wolfe, Marcus T., 2018. "The struggle is real: self-employment and short-term psychological distress," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 128-136.
    14. Gengzhi Huang & Desheng Xue & Bo Wang, 2020. "Integrating Theories on Informal Economies: An Examination of Causes of Urban Informal Economies in China," Sustainability, MDPI, Open Access Journal, vol. 12(7), pages 1-16, March.
    15. Ovidiu Stoica & Angela Roman & Valentina Diana Rusu, 2020. "The Nexus between Entrepreneurship and Economic Growth: A Comparative Analysis on Groups of Countries," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-19, February.
    16. Hoch, Felix & Lohwasser, Todor S., 2019. "The influence of institutions on venture capital: How transaction costs, uncertainty, and change affect new ventures," Discussion Papers of the Institute for Organisational Economics 9/2019, University of Münster, Institute for Organisational Economics.
    17. Ana-Maria Zamfir & Cristina Mocanu & Adriana Grigorescu, 2018. "Resilient Entrepreneurship among European Higher Education Graduates," Sustainability, MDPI, Open Access Journal, vol. 10(8), pages 1-24, July.
    18. Olabimtan Adebowale & David Lawson, 2018. "Does access to formal finance matter for stimulating entrepreneurship in developing countries? Evidence from non-farm entrepreneurial activities in Nigeria," Global Development Institute Working Paper Series 262018, GDI, The University of Manchester.
    19. World Bank & International Energy Agency, "undated". "Sustainable Energy for All 2015," World Bank Other Operational Studies 22148, The World Bank.

    More about this item

    Keywords

    self-employment; entrepreneurship; development;

    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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