Kar, Saibal and Mukherjee, Vivekananda (2006): Entrepreneurial culture, occupational choice and tax policy. Published in: Development Challenges: Some Contemporary Issues (Eds.) Joyashree Roy and Ajitava Raychaudhuri, New Delhi: Allied Publishers (2006): pp. 1-19.
Download (305kB) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||Entrepreneurial culture, occupational choice and tax policy|
|Keywords:||Entrepreneurial culture, Self-employment, Risk aversion, Income variance, National Income, Tax-subsidy Policy|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand
|Depositing User:||Saibal Kar|
|Date Deposited:||26. Jul 2010 08:59|
|Last Modified:||03. May 2015 08:16|
Appelbaum, Elie & Katz, Eliakim (1986) Measures of risk aversion and comparative statics of industry equilibrium. American Economic Review 76(3), 524-529.
Arrow, Kenneth J (1965). Aspects of the theory of risk bearing; Helsinki: Yrjo Jahnssonin Saatio Lecture 2; reprinted in Individual Choice under Certainty and Uncertainty; Collected Papers of Kenneth J. Arrow, Vol. 3, The Belknap Press of Harvard University Press, Cambridge, Mass. 1984.
Balkin, Steven. (1989). Self-employment for low-income people. New York: Praeger.
Banerjee, Abhijit V & Newman, Andrew F (1993). Occupational choice and the process of development. The Journal of Political Economy, 101 (2), 274-298.
Bates, Timothy. (1995). Self-employment entry across industry groups. Journal of Business Venturing, 10 (6), 143-56.
------------------- (1997). Race, self-employment and upward mobility: an illusive American dream; The Woodrow Wilson Center Press, Washington .C. and The Johns Hopkins University Press, Baltimore and London.
Boadway, Robin et al. (1998) Entrepreneurship, asymmetric information and unemployment. International Tax and Public Finance, 5(3), 307-27.
Bonacich, Edna and Modell, John. (1981). The economic basis of ethnic solidarity. Berkeley, University of California Press.
Borjas, George. (1987). Self-selection and the earnings of immigrants. The American Economic Review, 77(4), 531-53.
Brock, W. & Evans, D.S (1986) The economics of small business: Their role and regulations in the US economy. New York: Holmes and Meier.
Calvo, G. & Wellisz, S (1980) Technology, entrepreneurs, and firm size. Quarterly Journal of Economics, 95, (4), 663-77.
Casson, M. (1982). The entrepreneur: An economic theory. Totowa, NJ: Barnes and Nobles Books.
Casson, Mark. (1991). The economics of business culture. Oxford (Clarendon Press)
Casson, M. & Godley, A. (2000). (Eds.) Cultural factors in economic growth. Ch. 1, p. 1-43.
De Wit, Gerrit (1993). Determinants of self-employment: Studies in Contemporary Economics Series; Physica-Verlag, Heidelberg.
Duleep, H. O. and Regets, Mark (1997) The decline in immigrant entry earnings: Less transferable skills or lower ability? Quarterly Review of Economics and Finance, 37, Special Issue.
Evans, D.S & Jovanovic, B (1989). An estimated model of entrepreneurial choice under liquidity constraints. Journal of Political Economy 97(4), 808-27.
Fairlie, Robert W. (1996). Ethnic and racial entrepreneurship: A study of historical and contemporary differences. Garland Publishing, Inc: NY and London.
Funkhouser, E. and Trejo, Stephen. (1995). The labor market skills of recent male immigrants: Evidence from the Current Population Surveys. Industrial and Labor Relations Review, 48, 792-811.
Ghatak, M and Jiang, N. (2002). A simple model of inequality, occupational choice and development. Journal of Development Economics, 69, 205-226.
Godley, Andrew. (2001). Jewish immigrant entrepreneurship in New York and London 1880-1914: Enterprise and culture. Palgrave: Hampshire, UK; NY.
Gupta, Ashis. (1991). Indian entrepreneurial culture: Bengal and eastern India. In Brigitte Berger (ed.) The culture of entrepreneurship. San Francisco: ICS Press.
Holtz-Eakin, D., Joulfaian, D. and Rosen, H. (1994). Sticking it out: entrepreneurial survival and liquidity constraints. The Journal of Political Economy, 102(1), 53-75.
Hout, M and Rosen, Harvey. (2000). Self-employment, family background and race. The Journal of Human Resources, 35 (4), 670-92.
Jovanovic, Boyan (1982). Selection and the evolution of industry. Econometrica 50(3), 649-70.
Kanbur, S. M. Ravi. (1979). Impatience, information and risk taking in a general equilibium model of occupational choice. The Review of Economic Studies,46 , 707-718.
Kanbur, S.M. (1981). Risk taking and taxation – An alternative perspective. Journal of Public Economics, 15, 163-184.
Kar, S and Katz, E. (2002). Asymmetric Information, Migration and Self-Employment. Unpublished Ph. D. Dissertation, August 2002, Northern Illinois University, USA.
Kihlstrom, R. E & Laffont, J-J. (1979). A general equilibrium entrepreneurial theory of firm formation based on risk aversion. The Journal of Political Economy 87(4), 719-748.
Kirzner, Israel (1973). Competition and entrepreneurship. The University of Chicago Press, Chicago, London.
Kirby, M. (1992). Institutional rigidities ad economic decline: Reflections on the British experience. Economic History Review, 45.
Knight, F. H. (1921). Risk, uncertainty and profit. Chicago: University of Chicago Press.
LaLonde, Robert and Topel, Robert (1992). The assimilation of immigrants in the U.S. labor market. In George Borjas and Richard Freeman (eds.), Immigration and the work force: Economic consequences for the United States and source areas. Chicago University Press, Chicago.
Landes, David. (1998). The wealth and poverty of nations. NY: Little Brown.
Lazear, E.P & Moore, R.L (1984) Incentives, productivity, and labor contracts. Quarterly Journal of Economics 99(2), 275-296.
Leibenstein, H. (1978). General X-efficiency theory and economic development. NY: Oxford University Press.
Light, Ivan (1985). Immigrant entrepreneurs in America: Koreans in Los Angeles. In Clamor At the Gates: The New American Immigration. San Francisco: ICS Press.
Lucas, Robert. (1978). On the size distribution of business firms. Bell Journal of Economics, 9(2), 508-23.
Newman, A. (1995). Risk Bearing and Knightian Entrepreneurship. Department of Economics Working Paper, Columbia University.
Pratt, J. W. (1964). Risk aversion in the small and in the large. Econometrica, 32 (1/2), 122-136.
Rees, Hedley & Shah, Anup (1986). An empirical analysis of self-employment in the U.K. Journal of Applied Econometrics, 1, 95-108.
Schumpeter, J. A. (1934). The theory of economic development. Cambridge, MA: Harvard University Press.
Sexton, D. L & Bowman, N (1985, Winter) The entrepreneur: A capable executive and more. Journal of Business Venturing 129-140.
Yuengert, Andrew M. (1995). Testing hypotheses of immigrant self-employment. The Journal of Human Resources, 30(1), 194-204.