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Self-Employment and Wage Earning: Hungary During Transition

  • Ira N. Gang

    ()

    (Rutgers University)

  • Catherine Y. Co

    ()

    (University of Nebraska at Omaha)

  • Myeong-Su Yun

    ()

    (Tulane University)

We examine the earnings determinants of the self-employed and wage earners in Hungary in the mid-1990's, taking into account two forms of selection: selection into working or non-working for every individual in our sample and selection into self-employment or wage-earning jobs for workers only. Previous studies use switching regression to examine the returns to individual characteristics taking into account only selection into self-employment or wage-earning jobs. We find that the estimated returns to individual characteristics when accounting for both forms of selection differ from estimates correcting for only selection into self-employment or wage-earning jobs. We also find that the earnings determinants of the two sectors are not significantly different from each other.

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Paper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 200219.

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Date of creation: 22 Aug 2002
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Handle: RePEc:rut:rutres:200219
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  1. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  2. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
  3. 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 229-34, July-Sept.
  4. 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 for the Study of Labor (IZA).
  5. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
  6. 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 808-27, August.
  7. Blau, David M., 1986. "Self-employment, earnings, and mobility in Peninsular Malaysia," World Development, Elsevier, vol. 14(7), pages 839-852, July.
  8. 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.
  9. Catherine Y. Co & Ira N. Gang & Myeong-Su Yun, 2000. "Returns to returning," Journal of Population Economics, Springer, vol. 13(1), pages 57-79.
  10. Ham, John C, 1982. "Estimation of a Labour Supply Model with Censoring Due to Unemployment and Underemployment," Review of Economic Studies, Wiley Blackwell, vol. 49(3), pages 335-54, July.
  11. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  12. Fishe, Raymond P. H. & Trost, R. P. & Lurie, Philip M., 1981. "Labor force earnings and college choice of young women: An examination of selectivity bias and comparative advantage," Economics of Education Review, Elsevier, vol. 1(2), pages 169-191, April.
  13. Earle, John S. & Sakova, Zuzana, 2000. "Business start-ups or disguised unemployment? Evidence on the character of self-employment from transition economies," Labour Economics, Elsevier, vol. 7(5), pages 575-601, September.
  14. Sumner, Daniel A, 1981. "Wage Functions and Occupational Selection in a Rural Less Developed Country Setting," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 513-19, November.
  15. Andrew M. Yuengert, 1995. "Testing Hypotheses of Immigrant Self-Employment," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 194-204.
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