Entrepreneurial Culture, Occupational Choice and Tax Policy

DEVELOPMENT CHALLENGES: SOME CONTEMPORARY ISSUES, Joyashree Roy, Ajitava Raychaudhuri, eds., pp. 1-20, New Delhi: Allied Publishers, 2005

26 Pages Posted: 16 Jan 2008

See all articles by Saibal Kar

Saibal Kar

Centre for Studies in Social Sciences, Calcutta; Institute of Labor Economics (IZA)

Vivekananda Mukherjee

Jadavpur University

Abstract

This paper studies the influence of entrepreneurial culture among social groups in an economy. The cultural factor determines their occupational preferences. We develop a model in which a concentration factor has been used as a measure of business culture determining the occupational choice patterns of otherwise identical social groups. The occupational distribution of individuals from different groups is obtained by comparing expected utilities from employment and entrepreneurship. Based on the labor market outcomes the mean income and income variance of different groups is calculated. Individuals from groups with greater cultural traits display higher relative risk aversion with a high income variance compared to other groups. We propose a tax- subsidy policy and obtain conditions for maximizing social utility.

Keywords: Entrepreneurial culture, Self-employment, Risk aversion, Income variance, National Income, Tax-subsidy Policy

JEL Classification: D81, J23, H24

Suggested Citation

Kar, Saibal and Mukherjee, Vivekananda, Entrepreneurial Culture, Occupational Choice and Tax Policy. DEVELOPMENT CHALLENGES: SOME CONTEMPORARY ISSUES, Joyashree Roy, Ajitava Raychaudhuri, eds., pp. 1-20, New Delhi: Allied Publishers, 2005. Available at SSRN: https://ssrn.com/abstract=1084398

Saibal Kar (Contact Author)

Centre for Studies in Social Sciences, Calcutta ( email )

R-1, Baishnabghata Patuli Township
Calcutta, 700 094
India
91-33-2462 7252 (Phone)
91-33-2462 6183 (Fax)

HOME PAGE: http://www.cssscal.org

Institute of Labor Economics (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Vivekananda Mukherjee

Jadavpur University ( email )

Calcutta, West Bengal 700032
India

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