Why leave wage work and become self-employed ? Independence, earnings or unemployment.

Tattara, Giuseppe and Volpe, Mario (1999): Why leave wage work and become self-employed ? Independence, earnings or unemployment.

Abstract

The paper addresses the problem of the relation between self-employment and employee status. The issue is whether self-employment is a form of disguised unemployment or a suitable long term form of employment towards which gravitate the most successful wage-workers: wage-workers attracted by an activity that is more independent and more apt to bring their personality to the foreground. The paper focuses on a detailed study of previous experience as an employee (entrance, duration, mobility, status, firm’s size) to evaluate this point. Individuals enter self-employment for the first time at a very young age, and the choice is the result of a period of high mobility, unemployment and inactivity after the first entrance into the labour market as an employee. Self-employment does not seem to be bound by a liquidity constraint or by the need to accumulate assets in order to start a viable businesses, the usual reasons brought about to explain deferred entry, or by the time necessary to discover a viable business opportunity: it is directly linked to movements in wage employment and represents a temporary solution to face an unattended negative shock.

• Item Type: MPRA Paper
• Language: English
• Keywords: Unemployment, Self-emeplyment, Transitions in the Labour Market
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; J - Labor and Demographic Economics > J8 - Labor Standards: National and International > J82 - Labor Force Composition; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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