[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/diw/diwsop/diw_sp932.html
   My bibliography  Save this paper

The Dynamics of Solo Self-Employment: Persistence and Transition to Employership

Author

Listed:
  • Daniel S. J. Lechmann
  • Christoph Wunder
Abstract
This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo selfemployment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.

Suggested Citation

  • Daniel S. J. Lechmann & Christoph Wunder, 2017. "The Dynamics of Solo Self-Employment: Persistence and Transition to Employership," SOEPpapers on Multidisciplinary Panel Data Research 932, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp932
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.566900.de/diw_sp0932.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rabe-Hesketh, Sophia & Skrondal, Anders, 2013. "Avoiding biased versions of Wooldridge’s simple solution to the initial conditions problem," Economics Letters, Elsevier, vol. 120(2), pages 346-349.
    2. ., 2013. "The Global Entrepreneurship and Development Index," Chapters, in: Global Entrepreneurship and Development Index 2013, chapter 4, pages iii-iii, Edward Elgar Publishing.
    3. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54, January.
    4. Marco Caliendo & Alexander Kritikos, 2010. "Start-ups by the unemployed: characteristics, survival and direct employment effects," Small Business Economics, Springer, vol. 35(1), pages 71-92, July.
    5. Maria Minniti & William Bygrave, 2001. "A Dynamic Model of Entrepreneurial Learning," Entrepreneurship Theory and Practice, , vol. 25(3), pages 5-16, April.
    6. Victoria Prowse, 2012. "Modeling Employment Dynamics With State Dependence and Unobserved Heterogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(3), pages 411-431, April.
    7. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    8. Marco Caliendo & Jens Hogenacker & Steffen Künn & Frank Wießner, 2012. "Alte Idee, neues Programm: Der Gründungszuschuss als Nachfolger von Überbrückungsgeld und Ich-AG [Old idea, new program: The new start-up subsidy as a successor of the former bridging allowance and," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 99-123, July.
    9. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    10. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 83-106.
    11. Alexander S. Kritikos, 2024. "Entrepreneurs and their impact on jobs and economic growth," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-8.2, October.
    12. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    13. Karl Brenke, 2013. "Allein tätige Selbständige: starkes Beschäftigungswachstum, oft nur geringe Einkommen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 80(7), pages 3-16.
    14. Andrew Henley, 2004. "Self-Employment Status: The Role of State Dependence and Initial Circumstances," Small Business Economics, Springer, vol. 22(1), pages 67-82, February.
    15. ., 2013. "Markets, competition and entrepreneurship," Chapters, in: The Rediscovery of Classical Economics, chapter 6, Edward Elgar Publishing.
    16. Immervoll, Herwig & Jenkins, Stephen P. & Königs, Sebastian, 2015. "Are Recipients of Social Assistance 'Benefit Dependent'? Concepts, Measurement and Results for Selected Countries," IZA Discussion Papers 8786, Institute of Labor Economics (IZA).
    17. repec:bla:econom:v:47:y:1980:i:187:p:247-83 is not listed on IDEAS
    18. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, January.
    19. Rosen, Sherwin, 2007. "Studies in Labor Markets," National Bureau of Economic Research Books, University of Chicago Press, number 9780226726304, September.
    20. repec:ucp:bknber:9780226726281 is not listed on IDEAS
    21. Gert Wagner & Jan Göbel & Peter Krause & Rainer Pischner & Ingo Sieber, 2008. "Das Sozio-oekonomische Panel (SOEP): Multidisziplinäres Haushaltspanel und Kohortenstudie für Deutschland – Eine Einführung (für neue Datennutzer) mit einem Ausblick (für erfahrene Anwender)," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 2(4), pages 301-328, December.
    22. Anders Skrondal & Sophia Rabe-Hesketh, 2003. "Multilevel logistic regression for polytomous data and rankings," Psychometrika, Springer;The Psychometric Society, vol. 68(2), pages 267-287, June.
    23. ., 2013. "Entrepreneurs, firms, and global wealth since 1850," Chapters, in: Entrepreneurship and Multinationals, chapter 2, pages 13-56, Edward Elgar Publishing.
    24. ., 2013. "Entrepreneurship in post- conflict Iraq," Chapters, in: The Political Economy of Iraq, chapter 10, pages 183-208, Edward Elgar Publishing.
    25. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    26. repec:iza:izawol:journl:y:2014:p:8 is not listed on IDEAS
    27. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    28. Caliendo, Marco & Uhlendorff, Arne, 2008. "Self-Employment Dynamics, State Dependence and Cross-Mobility Patterns," IZA Discussion Papers 3900, Institute of Labor Economics (IZA).
    29. ., 2013. "The role of entrepreneurship in economic development," Chapters, in: Global Entrepreneurship and Development Index 2013, chapter 5, pages iii-iii, Edward Elgar Publishing.
    30. James J. Heckman, 1981. "Heterogeneity and State Dependence," NBER Chapters, in: Studies in Labor Markets, pages 91-140, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elisabeth Lopez-Perez & Ana Rodriguez-Santiago & Emilio Congregado, 2020. "Persistence in Self-Employment Rates before the Great Lockdown: The Case of the UK," Sustainability, MDPI, vol. 12(16), pages 1-13, August.
    2. Annika Nivala, 2024. "(No) Effects of Subsidizing the First Employee: Evidence of a Low Take-up Puzzle Among Firms," Working Papers 23, Finnish Centre of Excellence in Tax Systems Research.
    3. Jan Brzozowski & Anke Lasek, 2019. "The impact of self-employment on the economic integration of immigrants: Evidence from Germany," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 15(2), pages 11-28.
    4. Mario Bossler, 2019. "The Rise in Orientation at Collective Bargaining Without a Formal Contract," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(1), pages 17-45, January.
    5. Amjad Naveed & Nisar Ahmad & Rayhaneh Esmaeilzadeh & Amber Naz, 2019. "Self-Employment Dynamics of Immigrants and Natives: Individual-level Analysis for the Canadian Labour Market," Sustainability, MDPI, vol. 11(23), pages 1-22, November.
    6. Nivala, Annika, 2024. "(No) Effects of Subsidizing the First Employee: Evidence of a Low Take-up Puzzle Among Firms," Working Papers 166, VATT Institute for Economic Research.
    7. Stefan Schneck, 2018. "The Effect of Self-Employment on Income Inequality," SOEPpapers on Multidisciplinary Panel Data Research 999, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Joern H. Block & Christian Fisch & Mirko Hirschmann, 2022. "The determinants of bootstrap financing in crises: evidence from entrepreneurial ventures in the COVID-19 pandemic," Small Business Economics, Springer, vol. 58(2), pages 867-885, February.
    9. Cowling, Michael Leith & Wooden, Mark, 2021. "Does solo self-employment serve as a ‘stepping stone’ to employership?," Labour Economics, Elsevier, vol. 68(C).
    10. Stefan Schneck, 2020. "Self-employment as a source of income inequality," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 45-64, March.
    11. Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2022. "Personality characteristics and the decision to hire," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 31(3), pages 736-761.
    12. Bachmann, Ronald & Gonschor, Myrielle & Milasi, Santo & Mitra, Alessio, 2023. "Technological progress and the dynamics of self-employment: Worker-level evidence for Europe," Ruhr Economic Papers 1023, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Cizek, Pavel & Sadikoglu, Serhan, 2022. "Nonseparable Panel Models with Index Structure and Correlated Random Effects," Other publications TiSEM 7899deb9-0eda-47e6-a3b8-2, Tilburg University, School of Economics and Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lechmann, Daniel S. J. & Wunder, Christoph, 2016. "The dynamics of solo self-employment: Persistence and transition to employership," Discussion Papers 98, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    2. Ferrante, Francesco & Federici, Daniela & Parisi, Valentino, 2017. "University Students and Entrepreneurship. Some insights from a population-based survey," MPRA Paper 76980, University Library of Munich, Germany.
    3. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    4. Peter van der Zwan & Jolanda Hessels & Cornelius A. Rietveld, 2015. "The Pleasures and Pains of Self-Employment: A Panel Data Analysis of Satisfaction with Life, Work, and Leisure," Tinbergen Institute Discussion Papers 15-099/VII, Tinbergen Institute.
    5. Elert, Niklas & Henrekson, Magnus & Stenkula, Mikael, 2017. "Institutional Reform for Innovation and Entrepreneurship: An Agenda for Europe," Working Paper Series 1150, Research Institute of Industrial Economics, revised 16 Feb 2017.
    6. Marco Caliendo & Maximilian Goethner & Martin Weißenberger, 2020. "Entrepreneurial persistence beyond survival: Measurement and determinants," Journal of Small Business Management, Taylor & Francis Journals, vol. 58(3), pages 617-647, May.
    7. Cowling, Michael Leith & Wooden, Mark, 2021. "Does solo self-employment serve as a ‘stepping stone’ to employership?," Labour Economics, Elsevier, vol. 68(C).
    8. Patricia Kotnik & Rok Stritar, 2015. "ICT as the Facilitator of Entrepreneurial Activity: An Empirical Investigation," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 277-277, February.
    9. Schnitzlein, Daniel D. & Stephani, Jens, 2016. "Locus of Control and low-wage mobility," Journal of Economic Psychology, Elsevier, vol. 53(C), pages 164-177.
    10. Nikolova, Milena, 2018. "Self-Employment Can Be Good for Your Health," GLO Discussion Paper Series 226, Global Labor Organization (GLO).
    11. Nikolova, Milena, 2019. "Switching to self-employment can be good for your health," Journal of Business Venturing, Elsevier, vol. 34(4), pages 664-691.
    12. Martin Binder, 2017. "Entrepreneurial Success and Subjective Well-Being: Worries about the Business Explain One's Well-Being Loss from Self-Employment," SOEPpapers on Multidisciplinary Panel Data Research 947, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Marco Caliendo & Jens Hogenacker & Steffen Künn & Frank Wießner, 2015. "Subsidized start-ups out of unemployment: a comparison to regular business start-ups," Small Business Economics, Springer, vol. 45(1), pages 165-190, June.
    14. Gusciute, Egle & Quinn, Emma & Barrett,Alan, 2015. "Business Migration to Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS43.
    15. Eugen Musta & Elvin Meka, 2015. "Lack of Credit in Albania; Who is to “Blame†Analyzing the Demand," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, ejes_v1_i.
    16. Alessandro Rosiello & Dave Wield & Omid Omidvar & Michele Mastroeni & Joyce Tait, 2015. "Science and Innovation in Scotland: a Study on the Impact of Enhanced Autonomy," ERSA conference papers ersa15p1014, European Regional Science Association.
    17. Okamura, Kazuaki & Islam, Nizamul, 2021. "Multinomial employment dynamics with state dependence and heterogeneity: Evidence from Japan," Economic Modelling, Elsevier, vol. 101(C).
    18. Sorgner, Alina & Fritsch, Michael, 2013. "Stepping Forward: Personality Traits, Choice of Profession, and the Decision to Become Self-Employed," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79768, Verein für Socialpolitik / German Economic Association.
    19. Parker, Simon C., 2013. "Do serial entrepreneurs run successively better-performing businesses?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 652-666.
    20. Alexander Mosthaf & Thorsten Schank & Claus Schnabel, 2014. "Low-wage employment versus unemployment: Which one provides better prospects for women?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-17, December.

    More about this item

    Keywords

    state dependence; dynamic multinomial logit; solo self-employment; own-account worker; stepping stone; German SOEP;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp932. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/sodiwde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.