Self-Employment in Spain During the Nineties: An Approach to its Determinants and Success

Abstract

This paper investigates the determinants of self-employment entry and success in Spain during the Nine-ties by means of two complementary data sets. The data used come from the European Community Household Panel (ECHP) and from the Spanish Continuous Expenditure Survey (ECPF). Toward this end, different transitions are explicitly considered by means of different starting status –unemployed or paid-employed- and final destinations –employers and own-account workers-. In addition, the decision of entering employership from own-account work is also analyzed, as a sign of success. In conducting this analysis, discrete choice models, including binary and multinomial logit models are applied. We obtain evidence of how all informal processes of acquisition of this capital (i.e. previous experience in the labour market or intergenerational transfers) present stronger effects than those attached to formal education. In addition, and consistent with the idea that self-employment is se en as an alternative to unemployment, transitions from unemployment are much more likely than transitions from paid-employment. Finally, we obtain little evidence in favour of any of the hypotheses of the push-pull controversy, which might be explained by the existence of both effects working at the same time (as a result, neither dominates the other).

Keywords: Entrepreneurship, self-employment, unemployment, occupational choice, Spain

JEL Classification: J24, J64, J68, M13, L26