The labour market consequences of self-employment spells: European evidence

Arbeitspapier

We examine how those re-entering paid-employment after a brief self-employment spell fare upon return using data from the European Community Household Panel. Unconditionally, those re-entering paid-employment appear to have considerably lower wages than those staying in the wage sector. This difference appears to be larger in Europe than in the US. Conditional analysis suggests, however, that the difference is more apparent than real : It seems that Europeans select negatively into (and possibly out-of) self-employment, i.e., the likelihood of entering (and exiting) entrepreneurship correlates negatively with unobserved ability and/or in-paid-employment productivity. Our analysis of non-wage outcomes indicates that the selection is mostly involuntary and that for highly educated men, the brief self-employment spells are unemployment in disguise.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ETLA Discussion Papers ; No. 1129

Classification and Topics

• Classification: Wirtschaft ; Labor Demand ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials
• Subject: self-employment ; job mobility ; earnings ; wage differentials ; selection ; Selbstständige ; Lohnniveau ; Arbeitskräfte ; Lohnstruktur ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hyytinen, Ari ; Rouvinen, Petri
• Event: Veröffentlichung
• (who): The Research Institute of the Finnish Economy (ETLA)
• (where): Helsinki
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/64023
• Last update: 10.03.2025, 11:44 AM CET