Business Start-Ups or Disguised Unemployment? Evidence on the Character of Self-Employment from Transition Economies
36 Pages Posted: 31 Oct 2000
We study the character of self-employment, drawing upon household survey evidence from six transition economies. Multinomial-logit analysis distinguishing employers from own-account self-employed and comparing both groups to employees and unemployed finds that own-account status is intermediate in most characteristics; tests reject the pooling of any of these categories. Selection-bias-corrected earnings premia are large for employers and smaller for own-account. A structural polychotomous model shows that employers respond strongly to predicted earnings premia in all countries, while the own-account response is estimated to be negative, supporting the interpretation that individuals may be pushed into own-account status by lack of work opportunities.
Keywords: self-employment, entrepreneurship, transition, private employment, Eastern Europe
JEL Classification: J23, J31, J6, O17, O57, P5
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