The dynamics of solo self-employment: Persistence and transition to employership

Daniel S.J. Lechmann and Christoph Wunder

Labour Economics, 2017, vol. 49, issue C, 95-105

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 self-employment 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.

Keywords: State dependence; Dynamic multinomial logit; Solo self-employment; Own-account worker; Stepping stone; German SOEP (search for similar items in EconPapers)
JEL-codes: J23 J62 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:49:y:2017:i:c:p:95-105

DOI: 10.1016/j.labeco.2017.09.002

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