Economic Transition and the Determinants of Self-employment in Urban China: 2007-2013

Xinxin Ma, 欣欣 馬 and Shi Li

No 2016-3, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: This paper conducts two hypotheses testing and provides evidence on the determinants of self-employment for local urban residents and migrants in urban China. Using CHIP2007 and CHIP2013, the employment status is divided into four categories― self-employed employers, own-account workers, employees, and the unemployed. Several major conclusions emerge. First, utilizing the imputed wage premiums, the business creation hypothesis is rejected for both the local urban residents and migrants groups in 2007. However, in 2013, the business creation hypothesis is supported when a worker choice to become a self-employed employer. Whereas the influences of wage premiums on the probability of becoming an own-account worker are negatively significant for both the local urban residents group and the migrants group, so the business creation hypothesis is rejected when a worker choice to become an own-account worker. Second, the choice to become a self-employed employer for the local urban residents group, and the choice to become an own-account worker for the migrants group in the initial economy reform period can gain more benefit, so the business creation hypothesis is supported for older generation group, whereas this hypothesis is rejected for the younger generation group for both the local urban residents and migrants groups.

Keywords: self-employed employer; own-account worker; business creation hypothesis; disguised unemployment hypothesis; urban China (search for similar items in EconPapers)
JEL-codes: J23 J31 O17 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-05
New Economics Papers: this item is included in nep-cna, nep-ent, nep-iue and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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