By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World

23 Pages Posted: 5 Jul 2014

See all articles by David N. Margolis

David N. Margolis

Centre d'Economie de la Sorbonne; IZA Institute of Labor Economics; World Bank - Social Protection Unit (HDNSP); Paris School of Economics (PSE)

Abstract

Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment, and labor market institutions. However, self-employment in the developing world tends to be low productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes.

Keywords: self-employment, entrepreneurship, development

JEL Classification: J21, L26, O14, O17

Suggested Citation

Margolis, David N., By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World. IZA Discussion Paper No. 8273, Available at SSRN: https://ssrn.com/abstract=2462705 or http://dx.doi.org/10.2139/ssrn.2462705

David N. Margolis (Contact Author)

Centre d'Economie de la Sorbonne ( email )

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IZA Institute of Labor Economics

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World Bank - Social Protection Unit (HDNSP) ( email )

Human Development Network
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Paris School of Economics (PSE) ( email )

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Paris, 75014 75014
France

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