Self-employment Rates Research Articles

The entrepreneurship-unemployment nexus in Croatia

PurposeThe purpose of this paper is to extend the literature on the entrepreneurship-unemployment nexus to the case of Croatia.Design/methodology/approachThe study uses the Toda-Yamamoto causality test within a vector autoregressive model to determine the causal dynamics between the self-employment rate (SER), unemployment rate (UR), industrial production, and credit in the case of Croatia from March 1998 to December 2016.FindingsThe results reveal support for the recession-push hypothesis. Specifically, the authors find that an increase in the UR Granger causes an increase in the SER.Research limitations/implicationsDue to data availability, a more detailed analysis of self-employment by industry was prohibitive.Practical implicationsThe results emphasize the importance of recognizing business cycle dynamics and the availability of credit when evaluating the causal relationship between entrepreneurship and unemployment.Social implicationsAs policy makers view entrepreneurship as a potential remedy for unemployment, particular attention needs to be given to both the phases of the business cycle and credit availability to support entrepreneurial ventures in the design of policy.Originality/valuePrevious studies on the causal dynamics between entrepreneurship and unemployment pertain to OECD countries. This is the first study to examine a transition economy recently admitted to the European Union.

Entrepreneurial career paths: occupational context and the propensity to become self-employed

We investigate the relationship between characteristics of an occupation-specific environment and the decision of employees to start an own business. A relatively high occupation-specific unemployment risk and high earnings risk are conducive to opt for self-employment. Also, occupations that are characterized by high self-employment rates foster entrepreneurial choice among their employees. The results suggest that career choices of future entrepreneurs are driven by different motivations than those of non-entrepreneurs. In particular, the expectation of a pronounced financial gain is critical for future entrepreneurs when they make their initial occupational choices in paid employment and it is also relevant for a self-employment choice. We find that when future entrepreneurs enter the labor market, they are more likely to choose occupations that require a relatively high variety of skills.

Becoming entrepreneurs: how immigrants developed entrepreneurial identities

PurposeThe purpose of this paper is to investigate the important process of how entrepreneurial identity is formed and constructed, with the perspective that entrepreneurial identity is social and dynamic, constantly shaped by various life episodes and human interactions, rather than static and unchanging.Design/methodology/approachThis qualitative study comprises 30 in-depth interviews with Chinese immigrants in West Canada. These immigrants had been employed professionals under the “Skilled Workers” immigration category but later became entrepreneurs. None of the entrepreneurs in this study had prior business ownership experience, and many of them said that they had never thought about running businesses until they came to Canada.FindingsA process model of entrepreneurial identity construction is presented. This paper advances the literature on entrepreneurship through the identification of three stages in the development of entrepreneurial identity: identity exploration, entrepreneurial mindsets building, and narrative development.Originality/valueThis study has important implications for the understanding of the exploratory and discovery mode of entrepreneurial identity construction. This study also moves away from the contextual and structural hypotheses as the sole explanations for the high rate of self-employment among immigrant entrepreneurs, and provides a useful starting point for a deeper understanding of the agency of immigrant entrepreneurs.

INEQUALITY, INFORMALITY, AND CREDIT MARKET IMPERFECTIONS

This paper develops a microfounded macroeconomic modeling framework to investigate the relationship between informality and the income distribution. We show that multiple equilibria may rise if credit markets are imperfect and that there is a nondivisible entry cost in the formal economy. The theoretical analysis demonstrates that in the steady state, low levels of inequality are negatively correlated with high informality; conversely, high inequality exacerbates informality. This finding supports the hypothesis of an optimal level of inequality that minimizes the informal economy relative to the impact of other levels of inequality. However, for ordinary income distributions, changes in the level of inequality have only a slight effect on the informality rate. We calibrate the model using data on the U.S. and Mexican economies to estimate the level of inequality that minimizes the informality rate. The self-employment rate emerges as the most relevant determinant of the informality rate.

Analyzing the Barriers and Limitations of Rural Women Employment (Case Study: Tuyserkan County)

Extended abstract 1. INTRODUCTION Employment is critical for poverty reduction and for enhancing women’s status, especially in rural community. The notion of work and self-employment for women is complex and different factors affect women employment. Based on research results and experiences in developing countries, in rural areas, women as a significant part of the population, face some social, cultural, economic and institutional limitation for starting or promoting a business. In this research, through a survey in a rural society, most of the barriers and limitations of rural women employment were distinguished and analyzed. 2. THEORETICAL FRAMEWORK Rural employment is a key to economic and social development in many countries like Iran. That’s why many researchers tried to find solutions and strategies for progression of rural employment especially for women, and also the barriers and obstacles of rural women self-employment. Based on researches, many different barriers can prevent the process of starting and developing a business. Some studies showed that socio-economic barrier like family opposition or lack of family supports, lack of women self-confidence and some cultural values and belief against women self-employment prevent the progression of women business in rural areas. Also, generally rural women have less access to fund and credit and this factor can limit the rate of self-employment and entrepreneurship by rural women. Lack of empowerment and skill is another issue that decreases the level of business starting by rural women. Personal characteristic and competence is also needed for staring a new business. Some researchers showed that lack of some competencies like self-confidence, ambiguity tolerance, risk taking and spirit of independence can prevent the level of self-employment intention. Based on researches, different barriers could have different influences on different societies and that’s why, for drawing a conceptual map for barriers of women employment and entrepreneurship, quantitative survey is needed. In this survey research, the role of different cultural, social, personal and institutional barriers and limitations of rural women employment were assessed through a factor analysis. 3. METHODOLOGY The current applied research is a quantitative and non-experimental study in terms of variables controlling. The main purpose of the study was to distinguish and analyze the most important barriers and limitations of rural women’s employment. To do that, 150 rural women in Tuyserkan, Hamedan province, were selected randomly as research sample. Based on review of theoretical literature, a structured questionnaire was made and used as a main tool to collect data. The validity of the questionnaire was assessed by panel of experts and the Reliability was measured by Cronbach α test (α=0.81). In order to analyze data, both SPSS18 and LISREL8.8 software were used. The SPSS was used for describing data and factor analysis and the LISREL was used in order to modelling structural equations. The results of structural equations showed good fitness of the model used for analyzing barriers of rural women employment. (RMSEA=0.063, AGFI=0.8, GFI=0.93(. 4. DISCUSSION Findings showed that rural women in this research face a group of limitations and barriers in starting and managing their business. Using exploratory factor analysis revealed that four main obstacles are very important in the process of starting and promoting business by rural women in their point of view. The most important factors were socio-cultural barriers like family opposition, lack of women self-confidence and some cultural values and belief against women self-employment (with 22.03% of barriers’ variances). This factor with some other barriers such as economic-environmental, personality and training-supporting barriers explained 62.30% of the variances of employment barriers. 5. CONCLUSION: According to the research results, it was found that rural women in this survey face different limitation and barriers in the process of self-employment which can influence on this process differently. Based on the research, it is recommended to pay attention to some cultural programs through media or social activities in order to reform some social and cultural barriers such as traditional mindset towards women's empowerment and their participation. It is also essential to provide learning opportunities for both men and women in rural areas in order to believe women and daughter abilities and empowerments in economic and social activities. The research results can help policymakers and managers to develop suitable supportive plans in different stages of starting and managing rural business by women.

Does non-employment based health insurance promote entrepreneurship? Evidence from a policy experiment in China

Previous researchers have shown that employment-based health insurance lowers job mobility and deters entrepreneurship. The Urban Resident Basic Medical Insurance (URBMI) program, piloted in 2007 in China and fully established in 2009, offers health insurance to about 271 million urban residents without formal employment. Before the implementation of URBMI, most urban residents obtained health insurance through their employers, and therefore a large number of unemployed and self-employed individuals were uninsured. Thus, URBMI creates a new insurance option that does not depend on formal employment and may promote entrepreneurship. We take advantage of this policy change to evaluate the effect of URBMI on self-employment. Using 2000–2011 data from the China Health and Nutrition Survey and a difference-in-differences approach with propensity score weighting, we found that URBMI increased self-employment rate by at least 8.73% for the overall population. The result was mainly driven by the URBMI’s impact on unhealthy workers, individuals with 12 years of schooling or less, and workers above 30 years old.

Self-employment differentials among foreign-born STEM and non-STEM workers

This paper uses the American Community Survey to examine the previously overlooked fact that foreign STEM (science, technology, engineering, and mathematics) graduates have much lower self-employment rates than their non-STEM counterparts, with an unconditional difference of 3.3 percentage points. We find empirical support for differing earnings opportunities as a partial explanation for this self-employment gap. High wages in STEM paid-employment combined with reduced earnings in self-employment make self-employment less desirable for STEM graduates. High self-employment rates among other foreign-born workers partially reflect weak paid-employment opportunities. Public policy should encourage efficient use of worker skills rather than low-value business venture creation.

Self-Employment, Workplace Flexibility, and Maternal Labor Supply: A Life-Cycle Model

While American women's employment rates fall in the years after they have a child, their self-employment rates do not. These contrasting patterns may be explained by the fact that self-employed women often have more control over their work schedule, hours, and location than wage and salary employed women. This paper quantifies the value of self-employment as a flexible work alternative for married mothers with young children and estimates the impact of the additional flexibility on women's employment and fertility decisions. Using data from the NLSY79, I incorporate self-employment into a life-cycle model of labor supply and fertility. I find that mothers with preschool-aged children value the flexible amenities self-employment offers at $7,400 annually, which represents around 25% of their average wage and salary earnings. A partial equilibrium counterfactual exercise suggests that self-employment flexibility increases fertility and self-employment, but decreases women's median lifetime earnings by 1.2%. Overall, my findings offer evidence that mothers value workplace flexibility and employment decisions.

The New Cooperative Medical Scheme and Self-Employment in Rural China

Using panel data from the China Health and Nutrition Survey, this study estimates the effect of the New Cooperative Medical Scheme (NCMS) on self-employment in rural China, based on a difference-in-differences method (combined with propensity score matching). Specifically, we compare employment status of the participants and non-participants groups before and after the NCMS was implemented (within the common-support region). We found that the NCMS increased a rural resident’s likelihood of shifting from working for others to self-employed by 38 percentage points and that of shifting from temporarily employed to self-employed by 23 percentage points. These results suggest that apart from reducing uncertainty in future spending for the insured due to catastrophic illness, universal health insurance could also have a positive effect on the labor market, namely, that of increasing rates of self-employment.

Self-employment in Latin America

This paper investigates the determinants of self employment in a sample of six Latin American countries (El Salvador, Costa Rica, Honduras, Ecuador, Paraguay and Jamaica) by the estimation of OLS equations that express the change in the rate of self employment in terms of the rate of: unemployment, salaried employment, participation, economic growth, and remittances. The paper finds that female and male self employment have different responses to participation, unemployment, remittances and economic growth, suggesting the need for particular attention to gender. Particular importance resides in the result that male self employment increases as male unemployment increases, but it does not respond to female unemployment. As well, male self employment decreases when economic growth increases, a response that does not take place in the case of female self employment. Human development and per capita social expenditures represent "lifeguards" that prevent falling into self employment, particularly important to women, and remittances have a stronger "push" effect on women to work in self employment than men. The results indicate that self employment is a means of subsistence in response to unemployment, economic stagnation, and inequality of opportunity and, as such, it is associated with poverty. Given the evidence that poor people die at an earlier age than the non-poor, in both developed and developing countries, the paper finds associations between self employment, poverty and premature death in Latin America. The paper concludes that self employment is a manifestation of a historical framework of inequality of opportunities and low taxation, which gives rise to persistent poverty trap. Low taxation results from income inequality and of the "capture" of government by the high income strata. This is a situation where tax increases are blocked and, in consequence, the public sector does not have sufficient revenues to strengthen equality of opportunity. The results contradict the argument that low taxation is conducive to the creation of jobs; instead, the results demostrate that the lack of sufficient tax revenues have incidence upon the expansion of the informal economy, poverty, and premature death. Low taxation relative to social needs violates the rights to live and work as contained in the Universal Declaration of Human Rights.

Self-Employment Differentials Among Foreign-Born Stem and Non-Stem Workers

This paper uses the American Community Survey to examine the previously overlooked fact that foreign STEM (science, technology, engineering, and mathematics) graduates have much lower self-employment rates than their non-STEM counterparts, with an unconditional difference of 3.3 percentage points. We find empirical support for differing earnings opportunities as a partial explanation for this self-employment gap. High wages in STEM paid-employment combined with reduced earnings in self-employment make self-employment less desirable for STEM graduates. High self-employment rates among other foreign-born workers partially reflect weak paid-employment opportunities. Public policy should encourage efficient use of worker skills rather than low-value business venture creation.

Does racial prejudice affect black entrepreneurship?: evidence exploiting spatial differences in prejudicial attitudes

ABSTRACTThis article explores the relationship between racial prejudice towards blacks and the black-white self-employment rate gap and provides the first direct empirical evidence that racial prejudice negatively impacts black self-employment, particularly in high start-up cost industries. To perform this analysis, I construct a measure of prejudicial attitudes using responses from the General Social Survey and estimate the relationship between self-employment and this index using the American Community Survey. I find that an amount of prejudice equal to the difference in least and most prejudiced census divisions increases the black-white self-employment rate gap in high start-up cost industries by 10.4–16.8%, depending upon whether parental self-employment is controlled for, and represents the entire impact of racial prejudice on the black-white self-employment rate gap. Additionally, racial prejudice widens the black-white self-employment income gap by between 6.4% and 8.2% in my full specification, dependent upon how income is measured. Evidence indicates that racial prejudice is causing blacks difficulty in financing their businesses. The results presented are robust to various modelling and data assumptions.

Persistence and change in interregional differences in entrepreneurship: England and Wales, 1921–2011

The paper explores time-persistence in interregional differences of self-employment rates in England and Wales in the 1921–2011 period by using census data. The results suggest a strong path-dependence in entrepreneurship as past self-employment rates have strong bearing on future ones. However, there is also some rank mobility reflected in the upward movements of London boroughs and downward movements of primarily coastal areas. Rank mobility relates to structural changes, changes in human capital, regional age structures and immigration.

Self-employment, earnings, and sexual orientation

Although many studies document differences by sexual orientation in earnings and other labor-market outcomes, little is known about differences in self-employment. Our study contributes to both the self-employment literature and sexual-orientation literature by analyzing differences in self-employment rates and earnings by sexual orientation. Gay men are less likely to be self-employed than married men, whereas lesbians are equally likely to be self-employed as married women. We find that gay men earn less than married men. We do find, however, that for those gay men who are self-employed, there is little evidence of a further earnings penalty, at least among full-time workers. Lesbians earn at least as much as married women, but receive no further earnings premium—or penalty—by being self-employed, again among full-time workers.

Self-employment amongst migrant groups: new evidence from England and Wales

Self-employment constitutes a vital part of the economy since entrepreneurs can provide employment not only for themselves but also for others. The link between self-employment and immigration is, however, complex, especially given the changing nature of self-employment. We investigate the evolving relationship between self-employment and immigration using recently released microdata from the 2011 Census for England and Wales. Our findings indicate large variations, with high self-employment rates observed for some groups with a long established history of migration to the UK (especially men born in Pakistan) and also for some groups who have arrived more recently (such as from the EU’s new member states). We further explore the differences, analyse variations by gender and identify key determining factors. In addition to certain socio-economic characteristics, it is found that migration-related influences, such as English language proficiency and period of arrival in the UK, play an important role for some groups.

A Conceptual Framework on Self-Employment in Later Life: Toward a Research Agenda

Older adults consistently have a higher rate of self-employment than their younger counterparts, and the rates of self-employment among workers continue to rise as age increases from the “young old” to the “old old.” However, we know relatively little about why older adults decide to pursue self-employment in later life, the self-employment experience itself, and the individual and societal outcomes of this growing type of work. Additionally, we know very little about how age itself is a factor in the decision to pursue this type of work in later life, how age impacts the type of self-employment pursued and its outcomes, and if and how other factors mediate the effects of age on self-employment. This article, through a review of the current empirical and conceptual literature, presents a new conceptual framework of self-employment in later life. It posits that there are several individual (e.g., age and other sociodemographic factors, perceived future time, and personal preferences and values) and contextual (e.g., family, community, and societal characteristics) antecedents, as well as individual (i.e., health and well-being and economic security) and societal (i.e., economic and community value) outcomes to later-life self-employment. It also argues for more exploratory research on the self-employment experiences of older adults, including how, where, and with whom the work is completed. Finally, this article provides a set of propositions designed to support a scholarly research agenda on self-employment in later life.

Przedsiębiorczość imigrantów w państwach UE i krajach OECD

Uwarunkowania rozwoju współczesnej gospodarki wiążą się z procesami globalizacyjnymi. Jednym z kluczowych elementów takiej gospodarki są migracje. Decyzja o emigracji wymaga przełamania wielu barier, podjęcia ryzyka. Wyzwaniem staje się funkcjonowanie w nowych warunkach społeczno-gospodarczych, gdzie każde podjęte działanie nacechowane jest innowacyjnością. Można postawić tezę, że działania takie wymagają od emigrantów rozwiniętych zachowań przedsiębiorczych. Połączenie zjawisk, takich jak migracje i przedsiębiorczość, a w konsekwencji analiza przedsiębiorczości imigrantów staje się interesującym polem badawczym. Celem głównym opracowania jest analiza zjawiska przedsiębiorczości wśród imigrantów oraz określenie istotnych obszarów dla dalszych prac badawczych. W ramach tak określonego celu poruszono zagadnienia odnoszące się do zachowań przedsiębiorczych oraz problematyki migracji. Dla potrzeb realizacji celu wykorzystano dostępną literaturę przedmiotu. Odczuwa się pewien niedosyt w zakresie prowadzonych badań, szczególnie pogłębionych, kompleksowych. W niektórych krajach (np. Grecja) można zauważyć wyższy wskaźnik samozatrudnienie wśród rdzennych mieszkańców, natomiast w innych (np. Polska) wśród imigrantów. Można przypuszczać, że na taki obraz mają wpływ z jednej strony bariery przedsiębiorcze dla emigrantów (kapitał, ograniczenia formalno-prawne), a z drugiej skłonność rodzimych mieszkańców do prowadzenia własnej firmy. Powstaje pytanie, na ile te różnice są wynikiem zachowań przedsiębiorczych, ograniczeń formalno-prawnych, wymuszonej przedsiębiorczości. Poznanie motywów migracji wśród przedsiębiorców imigrantów, z uwzględnieniem narodowości imigrantów oraz branży, w której działają w poszczególnych krajach, pozwoliłoby na formułowanie precyzyjnych wniosków.

Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment

This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an anti- entrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.

The effect of entrepreneurship on economic development—an empirical analysis using regional entrepreneurship culture

We use the historical self-employment rate as an indicator of a regional culture of entrepreneurship and take it as an instrument to analyze the effect of entrepreneurship on economic growth in recent periods. The results indicate that German regions with a high level of entrepreneurship in the mid-1920s have higher start-up rates about 50 years later. Thus, a regional culture of entrepreneurship is an important resource for the persistence of entrepreneurship. Furthermore, we find that there is a significant effect of start-up activity on regional employment growth when using entrepreneurship culture as instrument for start-up activity.

Women Entrepreneurship in Tamil Nadu-A Qualitative Study using Tows Analysis

Entrepreneurship is used as a major catalyst of economic development of the country. Rate of self-employment among women is increasing in several developing countries like India. Tamil Nadu, the state which is third ranked in industrial development has taken several measures to promote women entrepreneurship. Recent studies are focussed towards women empowerment and women entrepreneurship. TOWS analysis has been made to bring out the various aspects in terms of Threats (Challenges), Opportunities, Weaknesses and Strengths of women entrepreneurs in Tamil Nadu. This would make an attempt to understand the areas to be improved in terms of policy measures and support activities to promote women entrepreneurship in large scale.