Self-Employment, Educational Attainment and Employment Protection Legislation
University of Tuebingen; Institute for Applied Economic Research (IAW)
University of Tuebingen - Faculty of Economics and Business Administration
February 7, 2012
We analyse how educational attainment and employment protection influence an individual’s decision to become self-employed. By altering expected income from dependent employment, employment protection is likely to affect an individual’s choice of occupation, although such a link has not been established in the literature so far. We argue that an interaction between an individual’s educational attainment and the institution of employment protection exists when it comes to the decision regarding whether to become self-employed. Based on survey data from OECD countries, we find evidence for such a negative interaction, and find that only after taking this interaction into account can the effect of employment protection on self-employment rates be assessed.
Number of Pages in PDF File: 39
Keywords: education, employment protection legislation, occupational choice, self- employment
JEL Classification: J24, J63working papers series
Date posted: March 21, 2012
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