Abstract
About 4.2 million men and women operate businesses on a full-time basis. Comprising more than a tenth of all workers, they run most of our nation’s firms and employ about a tenth of all wage workers. The fraction of the labor force that is self-employed has increased since the mid-1970s after a long period of decline.1 This paper examines the process of selection into self-employment over the life cycle and the determinants of self-employment earnings using data from the National Longitudinal Survey of Young Men (NLS) for 1966–1981 and the Current Population Surveys for 1968–1987.
We are grateful to Christopher Flinn, Boyan Jovanovic, Jules Lichtenstein, Edward Starr, Hideki Yamawaki, participants of the International Conference on Small Business Economics held at the International Institute of Management, West Berlin, November 1988, and the referee for helpful comments and suggestions. Portions of our research were supported by the U.S. Small Business Administration under Contract No. SBA-1067-AER-86 to Fordham University and by faculty research fellowships provided by Fordham University to both authors. We retain responsibility for the views expressed below. We will provide a copy of a statistical appendix and the dataset used in this paper on AT-compatible diskettes upon request for one year after the publication date of this paper.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Abraham, Katherine and Farber, Henry, “Job Duration, Seniority, and Earnings,” American Economic Review, June 1987, 77, 278–297.
Altonji, Joseph and Shakotko, Robert, “Do Wages Rise with Job Seniority?” Review of Economic Studies, 1987, 54, 437–60.
Blau, David, “Self-Employment and Self-Selection in Developing Country Labor Markets,” Southern Economic Journal,February 1986, VOL, 351–363.
Blau, David, “A Time Series Analysis of Self-Employment,” Journal of Political Economy, June 1987, 95, 445–467.
Balkin, Steven, Self-Employment for Low Income People, New York: Praeger Press, 1989.
Becker, Eugene H., “Self-Employed Workers: An Update to 1983,” Monthly Labor Review, July 1984, 107, 14–18.
Bendick, Mark and Egan, Mary, “Transfer Payment Diversion for Small Business Development: British and French Experience,” Industrial and Labor Relations Review, July 1987, 40, 132–157.
Birch, David, The Job Generation Process, Cambridge, Mass.: Center for the Study of Neighborhood and Regional Change, Massachusetts Institute of Technology, 1979.
Borjas, George, “The Self-Employment of Immigrants,” Journal of Human Resources, Fall 1986, 21, 485–506.
Borjas, George and Bronars, S, S., “Self-Employment and Consumer Discrimination,” University of California at Santa Barbara, unpublished paper, August 1987.
Brock, William A. and Evans, David S., The Economics of Small Businesses: Their Role and Regulation in the U.S. Economy, New York: Holmes and Meier, 1986.
Brock, William A. and Evans, David S., “Small Business Economics,” Small Business Economics: An International Journal, January 1989, 1, 7–20.
Dollinger, Marc J., “Use of Budner’s Intolerance of Ambiguity Measure for Entrepreneurial Research,” Psychological Reports, May 1983, 53, 1019–1021.
Dunne, Timothy, Roberts, Mark and Samuelson, Larry, “The Impact of Plant Failure on Employment Growth in the U.S. Manufacturing Sector,” unpublished paper, Pennsylvania State University, January 1987.
Durand, Douglas and Shea, Dennis, “Entrepreneurial Activity as a Function of Achievement Motivation and Reinforcement Control,” The Journal of Psychology, June 1974, 88, 57–63.
Evans, David S., Entrepreneurial Choice and Success, Washington, D.C.: U.S. Small Business Administration, 1985.
Evans, David S., “Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries,” Journal of Industrial Economics, June 1987, 35, 567–582.
Evans, David S., “Tests of Alternative Theories of Firm Growth, ” Journal of Political Economy, August 1987, 95, 657–674.
Evans, David S. and Leighton, Linda, Self-Employment Selection and Earnings over the Lifecycle, Washington, D.C.: U.S. Small Business Administration, December 1987.
Evans, David S. and Jovanovic, Boyan, “Estimates of a Model of Entrepreneurial Choice under Liquidity Constraints,” Journal of Political Economy,August 1989, in press.
Fazzari, Steven, Hubbard, R. Glenn and Petersen, Bruce,”Financing Constraints and Corporate Investment,” NBER Working Paper No. 2387, Cambridge, Mass.: NBER, September 1987.
Feller, W., An Introduction to Probability Theory and Its Applications, New York: Wiley and Sons, 1968.
Fuchs, Victor, “Self-Employment and Labor-Force Participation of Older Males,” Journal of Human Resources, Fall 1982, 18, 339–57.
Heckman, James J., “The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables, and a Simple Estimator for Such Models,”Annals of Economic Measurement, Fall 1976, 22, 261–78.
Johnson, William, “A Theory of Job-Shopping,” Quarterly Journal of Economics, May 1978, 22, 261–78.
Jovanovic, Boyan, “Job Matching and the Theory of Turnover,” Journal of Political Economy, October 1979, 87, 972–90.
Jovanovic, Boyan, “The Selection and Evolution of Industry,” Economerrica, May 1982, 50, 649–70.
Kihlstrom, Richard and Laffont, Jean-Jacques, “A General Equilibrium Theory of Firm Formation Based on Risk-Aversion,” Journal of Political Economy, August 1979, 87, 719–48.
Knight, Frank, Risk, Uncertainty, and Profit, New York: Houghton Mifflin, 1921.
Leonard, Jonathan, “On the Size Distribution of Employment and Establishment,” NBER Working Paper No. 1951, 1986.
LeRoy, Stephen and Singell, Larry, D. Jr., “Knight on Risk and Uncertainty,” Journal of Political Economy, April 1987, 95, 394–407.
Light, Ivan, Ethnic Enterprise in America: Business and Welfare among Chinese, Japanese, and Blacks, Berkeley, Ca.: University of California Press, 1972.
Light, Ivan, “Disadvantaged Minorities in Self-Employment,” International Journal of Comparative Sociology, March 1979, 20, 31–45.
Lucas, Robert E., “On the Size Distribution of Business Firms,” Bell Journal of Economics, Autumn 1978, 9, 508–23.
McClelland, David C., The Achieving Society, Princeton, N.J.: D. Van Nostrant Co., 1964.
McClelland, David C. and Winter, David G., Motivating Economic Achievement, New York: The Free Press, 1969.
Miller, Robert, “Job Matching and Occupational Choice,” Journal of Political Economy, December 1984, 92, 1086–1120.
Min, Pyong Gap, “From White-Collar Occupations to Small Business: Korean Immigrants Occupational Adjustment,” Sociological Quarterly, Summer 1984, 333–352.
Pakes, Ariel and Ericson Richard, “Empirical Implications of Alternative Models of Firm Dynamics,” unpublished paper, Department of Economics, University of Wisconsin, December 1987.
Pandey, Janak and Tewary, N.B., “Locus of Control and Achievement Values of Entrepreneurs,” Journal of Occupational Psychology, February 1979, 52, 107–111.
Rees, Hedley and Anup Shah, “An Empirical Analysis of Self-Employment in the U.K.” Journal of Applied Econometrics, Spring 1986, 1, 95–108.
Schere, J., “Tolerance of Ambiguity as a Discriminating Variable between Entrepreneurs and Managers,” in Proceedings, New York: Academy of Management, 1982.
Schumpeter, Joseph, Capitalism, Socialism, and Democracy, 3d. ed., New York: Harper and Row, 1950.
Shapero, Albert, “The Displaced, Uncomfortable Entrepreneur,” Psychology Today, November 1975, 83–88.
Topel, Robert, “Job Mobility, Search, and Earnings Growth: A Reinterpretation of Human Capital Earnings Functions,” in: Ronald Ehrenberg, Research in Labor Economics, Greenwich, Ct.: JAI Press, 1986.
Wicker, Alan and King, Jean, “Employment, Ownership, and Survival in Microbusiness: A Study of New Retail and Service Establishments,” Small Business Economics: An International Journal, 1 (2), 1989, 137–152.
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1990 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Evans, D.S., Leighton, L.S. (1990). Some Empirical Aspects of Entrepreneurship. In: Acs, Z.J., Audretsch, D.B. (eds) The Economics of Small Firms. Studies in Industrial Organization, vol 11. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7854-7_6
Download citation
DOI: https://doi.org/10.1007/978-94-015-7854-7_6
Publisher Name: Springer, Dordrecht
Print ISBN: 978-90-481-4057-2
Online ISBN: 978-94-015-7854-7
eBook Packages: Springer Book Archive