Self-employment in post-communist Eastern Europe: a refuge from poverty or road to riches?

Abstract

Researchers analyzing self-employment in post-communist Eastern Europe have frequently adopted a “dualist” model which relegates the self-employed to marginal sectors of the economy. This paper challenges the dualist approach and argues that the self-employed cannot be regarded as refugees from poverty with few resources and few opportunities to earn high incomes and accumulate wealth. Data from the Czech Republic, Poland, and Slovakia are used to show that self-employment in post-communist Eastern Europe encompasses two distinct class locations: the individually self-employed on the one hand, whose socioeconomic status differs little from that of ordinary workers, and employers on the other, who receive incomes and possess assets far in excess of that of both the individually self-employed and ordinary workers. A proper understanding of the manner in which systems of stratification have changed in Eastern Europe thus requires that one acknowledge processes of differentiation among the self-employed as well as the importance of property ownership in generating new forms of social inequality in the post-communist period.