Transition out of self-employment – evidence from Poland

Abstract

PurposeThe purpose of this paper is to address the issue of self-employment exit in Poland and its determinants.Design/methodology/approachThe author examines the outflow from self-employment into different labour market status: employment, unemployment, inactivity using multinomial logistic regression. The analysis is conducted separately for men and women using Polish Labour Force Surveys (LFS) (2001-2007).FindingsResults indicate that personal and family characteristics have different impact on self-employment exit for men and women. However, unfavourable macroeconomic conditions have similar impact regardless gender. The author’s results show that higher local unemployment rate reduces the likelihood of self-employment exit into employment, while conducting business in a sector affected by economic downturn increase outflow from self-employment for both men and women.Research limitations/implicationsCertain limitations of the study arise from the design of the Polish LFS. It is a rotating panel with relatively few time periods, so it can only allow the author to analyse the outcomes in short-term perspectives.Practical implicationsThose results provide some background for potential policy interventions. In the context of persistent, high unemployment rates in Poland, there is need for some policy incentives which reinforce self-employment – an important alternative form of the labour market participation.Originality/valueMajority of previous studies focusses on self-employment creation, as policy incentives do. However, very little is known about the reasons for leaving self-employment. The author fills this gap analysing the outflow and transition from self-employment to different labour market status.