This article uses various micro data sets to study entrepreneurship. Consistent with the existence of capital constraints on potential entrepreneurs, the estimates imply that the probability of self‐employment depends positively upon whether the individual ever received an inheritance or gift. When directly questioned in interview surveys, potential entrepreneurs say that raising capital is their principal …
Tag Archives: Self‐Employment
Benz, M., &Frey, B. S. (2008). Being independent is a great thing: Subjective evaluations of self‐employment and hierarchy. Economica, 75(298), 362-383.
One can be independent, or one can be subject to decisions made by others. This paper argues that this difference, embodied in the institutional distinction between the decision‐making procedures ‘market’ and ‘hierarchy’, affects individual wellbeing beyond outcomes. Taking self‐employment as an important case of independence, it is shown that the self‐employed derive higher satisfaction from …
Hamilton, B. H. (2000). Does entrepreneurship pay? An empirical analysis of the returns to self-employment. Journal of Political economy, 108(3), 604-631.
Possible explanations for earnings differentials in self‐employment and paid employment are investigated. The empirical results suggest that the nonpecuniary benefits of self‐employment are substantial: Most entrepreneurs enter and persist in business despite the fact that they have both lower initial earnings and lower earnings growth than in paid employment, implying a median earnings differential of …