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http://hdl.handle.net/10419/20913
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| Title: | | Entrepreneurship from Scratch: Lessons on the Entry Decision into Self-Employment from Transition Economies  |
| Authors: | | Earle, John S. Sakova, Zuzana |
| Issue Date: | | 1999 |
| Series/Report no.: | | IZA Discussion paper series 79 |
| Abstract: | | This paper exploits the rapid rise in self-employment rates in post-communist Eastern Europe as a valuable ?quasi-experiment? for understanding the sources of entrepreneurship. A relative demand-supply model and an individual sectoral choice model are used to analyze a 1993 survey of 27,000 adults in six transition economies. Estimated selfemployment earnings premia are positive, and the data imply positive selection into both employee and self-employment status. Structural probit estimates show the probability of self-employment entry is unassociated with former Communist Party affiliation but positively related to schooling, pre-transition family income, receipt of property in restitution, precommunist family business-holding, and predicted earnings differential. Cross-country variation in predicted self-employment entry rates and relative earnings provide evidence on the demand and supply factors affecting the decision to become an entrepreneur. |
| Subjects: | | Entrepreneurship self-employment transition small business selection bias structural probit Eastern Europe Bulgaria Czech Republic |
| JEL: | | J24 J23 O57 M13 J62 P2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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