IDEAS home Printed from https://ideas.repec.org/p/har/wpaper/0112.html
   My bibliography  Save this paper

Social Capital and the Uncertainty Reduction of Self-Employment

Author

Listed:
  • Boris F. Blumberg
  • Gerard A. Pfann

Abstract

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
    as

    Download full text from publisher

    File URL: http://harrisschool.uchicago.edu/about/publications/working-papers/pdf/wp_01_12.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pfann, Gerard A., 2001. "Options to quit," Economics Letters, Elsevier, vol. 70(2), pages 259-265, February.
    2. De Wit, Gerrit & Van Winden, Frans A. A. M., 1990. "An empirical analysis of self-employment in the Netherlands," Economics Letters, Elsevier, vol. 32(1), pages 97-100, January.
    3. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
    4. Dolton, Peter J & Makepeace, G H, 1990. "Self Employment among Graduates," Bulletin of Economic Research, Wiley Blackwell, vol. 42(1), pages 35-53, January.
    5. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    6. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    7. Bosma, N. & van Praag, M. & de Wit, G., 2000. "Determinants of Successful Entrepreneurship," Papers 0002/e, NEUHUYS - RESEARCH INSTITUTE FOR SMALL AND MEDIUM.
    8. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
    9. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    10. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    11. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
    12. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
    13. Jovanovic, Boyan & Lach, Saul, 1989. "Entry, Exit, and Diffusion with Learning by Doing," American Economic Review, American Economic Association, vol. 79(4), pages 690-699, September.
    14. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-234, July-Sept.
    15. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    16. Bruderl, Josef & Preisendorfer, Peter, 1998. "Network Support and the Success of Newly Founded Businesses," Small Business Economics, Springer, vol. 10(3), pages 213-225, May.
    17. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-266, May.
    18. Bernard F. Lentz & David N. Laband, 1990. "Entrepreneurial Success and Occupational Inheritance among Proprietors," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 563-579, August.
    19. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
    20. Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-1526, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kinateder, Markus, 2009. "Team Formation in a Network," Sustainable Development Papers 50722, Fondazione Eni Enrico Mattei (FEEM).
    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. Letterie, W.A. & Blumberg, B.F., 2002. "Which business starters experience limited access to bank funds?," Research Memorandum 030, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nathalie Colombier & David Masclet, 2008. "Intergenerational correlation in self employment: some further evidence from French ECHP data," Small Business Economics, Springer, vol. 30(4), pages 423-437, April.
    2. Yannis Georgellis & Howard Wall, 2005. "Gender differences in self-employment," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 321-342.
    3. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    4. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    5. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    6. Sascha G. Walter & Achim Walter, 2009. "Personenbezogene Determinanten von Unternehmensgründungen: Stand der Forschung und Perspektiven des Fortschritts," Schmalenbach Journal of Business Research, Springer, vol. 61(1), pages 57-89, February.
    7. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    8. repec:cii:cepiei:2014-q2-138-2 is not listed on IDEAS
    9. Robert W. Fairlie & Alicia M. Robb, 2007. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 25(2), pages 289-323.
    10. Robert W. Fairlie, 2002. "Drug Dealing and Legitimate Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 538-567, July.
    11. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    12. Nathalie Colombier & David Masclet, 2007. "L'importance de l'environnement familial comme déterminant du travail indépendant," Économie et Statistique, Programme National Persée, vol. 405(1), pages 99-118.
    13. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
    14. Peter van der Zwan & Ingrid Verheul & Roy Thurik & Isabel Grilo, 2009. "Entrepreneurial Progress: Climbing the Entrepreneurial Ladder in Europe and the US," Tinbergen Institute Discussion Papers 09-070/3, Tinbergen Institute, revised 17 Mar 2010.
    15. Blumberg, Boris F. & Pfann, Gerard A., 2015. "Roads Leading to Self-Employment: Comparing Transgenerational Entrepreneurs and Self-Made Start-Ups," IZA Discussion Papers 9155, Institute of Labor Economics (IZA).
    16. Earle, John S. & Sakova, Zuzana, 1999. "Entrepreneurship from Scratch: Lessons on the Entry Decision into Self-Employment from Transition Economies," IZA Discussion Papers 79, Institute of Labor Economics (IZA).
    17. Mirjam van Praag, 2003. "Initial Capital Constraints Hinder Entrepreneurial Venture Performance: An empirical analysis," CESifo Working Paper Series 887, CESifo.
    18. Yannis Georgellis & Howard J. Wall, 2006. "Entrepreneurship and the policy environment," Review, Federal Reserve Bank of St. Louis, vol. 88(Mar), pages 95-112.
    19. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
    20. Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages 140-155, March.
    21. McCann, Brian T. & Folta, Timothy B., 2012. "Entrepreneurial entry thresholds," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 782-800.

    More about this item

    Keywords

    self-employment; social capital; human capital;
    All these keywords.

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:har:wpaper:0112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleanor Cartelli (email available below). General contact details of provider: https://edirc.repec.org/data/spuchus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.