Regional differences in self-employment in China
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This paper investigates the impact of personal characteristics and institutional environment on the decision to be self-employed in China. It is shown that a difference in the likelihood of being self-employed exists between urban and rural areas. Our results show that institutional differences between rural and urban areas influence self-employment decisions. Factors that exert a consistent impact regardless of the local institutional environment are marriage, education, money spent on weddings and gifts, economic openness, and accessibility of information. The impact of other factors differs across rural and urban areas. These factors include family ownership of real estate, experience, gender, population density, the management capacity of local government, and the development of private economy in the local community.
KeywordsSelf-employment Occupational choice Institutional environment Economic development
JEL classificationsJ24 L26 O12
This research uses data from the China Health and Nutrition Survey (CHNS). We owe much to James Kung, Dennis Tao Yang, and the two anonymous reviewers for their very helpful comments. We are also very much indebted to Min Chen, Margaret Loo, Sophia Lok, Yingshi Chen, and Mandy Cheung for their assistance in the research. Any remaining errors are ours.
We thank the National Institute of Nutrition and Food Safety, the Chinese Center for Disease Control and Prevention, the Carolina Population Center (5R24 HD050924), the University of North Carolina at Chapel Hill, the National Institutes of Health (NIH) (R01-HD30880, DK056350, R24 HD050924, and R01-HD38700), and the Fogarty International Center for financial support in collecting the CHNS data and the analysis files from 1989 to 2011 and future surveys.
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