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Social Capital and the Uncertainty Reduction of Self-Employment


  • Boris F. Blumberg
  • Gerard A. Pfann


We study the self-employed decision and its relation to human and social capital. Human capital is necessary to acquire skills. Social capital dampens the effects of uncertainty about future income. Our data set consists of 1339 respondents from the same age group, who were interviewed three times in life in 1957, 1983 and 1993. The self-employment probability equals 0.155 and peaks between ages 24 and 26. Duration analysis shows that social capital is the most important resource for self-employment.

Suggested Citation

  • Boris F. Blumberg & Gerard A. Pfann, 2001. "Social Capital and the Uncertainty Reduction of Self-Employment," Working Papers 0112, Harris School of Public Policy Studies, University of Chicago.
  • Handle: RePEc:har:wpaper:0112

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    References listed on IDEAS

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    Cited by:

    1. Markus Kinateder, 2009. "Team Formation in a Network," Working Papers 2009.36, Fondazione Eni Enrico Mattei.
    2. Kim, Byung-Yeon & Kang, Youngho, 2014. "Social capital and entrepreneurial activity: A pseudo-panel approach," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 47-60.
    3. Claudio Michelacci & Olmo Silva, 2007. "Why So Many Local Entrepreneurs?," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 615-633, November.
    4. Y Georgellis & J G Sessions & N Tsitsianis, 2005. "Self-Employment Longitudinal Dynamics: A Review of the Literature," Economic Issues Journal Articles, Economic Issues, vol. 10(2), pages 51-84, September.

    More about this item


    self-employment; social capital; human capital;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand


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