From Own-Account Worker to Job Creator

International Review of Entrepreneurship, Forthcoming

17 Pages Posted: 23 Feb 2010 Last revised: 13 Oct 2010

See all articles by Emilio Congregado

Emilio Congregado

University of Huelva

José María Millán

University of Huelva

Concepción Román

University of Huelva

Date Written: September 29, 2010

Abstract

This study aims to increase our understanding of the contribution of the self-employed to the job creation process by investigating the individual decision of hiring employees. Our framework considers the individual decision of becoming self-employed with employees from own-account self-employment, while other labour options such as paid employment, unemployment or inactivity are also considered. To this end, we apply multinomial logit models to data from the European Community Household Panel for the EU-15. The results suggest that informal processes for the acquisition of human capital (i.e., previous experience in the labour market or intergenerational transfers) present stronger effects on the decision of hiring employees than do the processes associated with formal education. In addition, we find that business earnings and economic growth have a strong positive effect on the likelihood of recruiting personnel, which supports the prosperity-pull argument. Finally, we also detect international divergences in this decision, which suggest the presence of specific regional factors at the institutional and/or cultural levels.

Keywords: Entrepreneurship, own-account workers, employers, job creation, occupational choice, Europe

JEL Classification: J23, J24, J38, L26

Suggested Citation

Congregado, Emilio and Millan, Jose Maria and Román, Concepción, From Own-Account Worker to Job Creator (September 29, 2010). International Review of Entrepreneurship, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1557330

Emilio Congregado (Contact Author)

University of Huelva ( email )

Departament of Economics
Plaza de la Merced, 11
Huelva, Huelva 21002
Spain

HOME PAGE: http://www.uhu.es/emilio.congregado

Jose Maria Millan

University of Huelva ( email )

Plaza de la Merced 11
Huelva, Huelva 21071
Spain
+34959217886 (Phone)

Concepción Román

University of Huelva ( email )

Plaza de la Merced 11
Huelva, Huelva 21071
Spain
+34959217886 (Phone)

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