The Emergence of New Entrepreneurs in Europe

Abstract

This work tries to shed some light on the decision of becoming self-employed with and without employees, distinguishing between paid-employment and unemployment as starting status. In doing so, we apply binary and multinomial logit models to data drawn from the European Community Household Panel for the EU-15 (ECHP, 1994-2001). Thus, we provide some evidence supporting the existence of different factors affecting each considered transition both in terms of intensity and direction of the causal relationship. Finally our study also suggests the existence of idiosyncratic factors decreasing the probability of transition in some European countries, which might be related with specific countries institutional characteristics. We argue that our results provides some useful guidelines for the European Entrepreneurship policy, mainly on the need to establish different incentives schemes for fostering different types of transitions to self-employment.

Keywords: Entrepreneurship, self-employment, occupational choice, Europe

JEL Classification: J18, J24, J38, J44, J58, J62