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The Dynamics of Self-employment in a Developing Country: Evidence from India

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  • Tamvada, Jagannadha Pawan

Abstract

We examine the spatio-temporal dynamics of self-employment in India using geoadditive models and pseudo panel techniques. We test the claim of Iyigun and Owen (1999) that individuals invest in professional human capital and not in entrepreneurial human capital as an economy develops. The results suggest that in non-agriculture, higher education decreases the likelihood of individuals choosing self-employment over time; however, it has an opposite effect in agriculture. While increases in land possessed increase the likelihood of self-employment choice in agriculture, individuals with small land holdings are more likely to transition into self-employment in non-agriculture. Belonging to a backward class has a negative effect on self-employment choice in both sectors; however, the effect has increased in non-agriculture and remained stable in agriculture. The geoadditive models suggest that the propensity to be self-employed has decreased across most spatial units, although there are few pockets where self-employment is rising again.

Suggested Citation

  • Tamvada, Jagannadha Pawan, 2010. "The Dynamics of Self-employment in a Developing Country: Evidence from India," MPRA Paper 20042, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20042
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    1. repec:spr:intemj:v:13:y:2017:i:2:d:10.1007_s11365-016-0409-4 is not listed on IDEAS
    2. Nazim Habibov & Elvin Afandi & Alex Cheung, 2017. "What is the effect of university education on chances to be self-employed in transitional countries?: Instrumental variable analysis of cross-sectional sample of 29 nations," International Entrepreneurship and Management Journal, Springer, vol. 13(2), pages 487-500, June.
    3. Njang Vera Anweh & Ndamsa Dickson Thomas, 2017. "Employment Vulnerability in Cameroon's Private Sector," Research Papers RP_333, African Economic Research Consortium.

    More about this item

    Keywords

    Entrepreneurship; Self-employment; Developing Countries; Dynamics; Pseudo Panels;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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