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Self-employment, educational attainment and employment protection legislation

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  • Baumann, Florian
  • Brändle, Tobias

Abstract

We analyse how educational attainment and employment protection influence an individual's decision to become self-employed. By altering expected income from dependent employment, employment protection is likely to affect an individual's choice of occupation, although such a link has not been established in the literature so far. We argue that an interaction between an individual's educational attainment and the institution of employment protection exists when it comes to the decision regarding whether to become self-employed. Based on survey data from OECD countries, we find evidence for a negative interaction, and conclude that only after taking this interaction into account can the effect of employment protection and educational attainment on self-employment rates be assessed.

Suggested Citation

  • Baumann, Florian & Brändle, Tobias, 2012. "Self-employment, educational attainment and employment protection legislation," Labour Economics, Elsevier, vol. 19(6), pages 846-859.
    • Handle: RePEc:eee:labeco:v:19:y:2012:i:6:p:846-859
    DOI: 10.1016/j.labeco.2012.08.008
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    Cited by:

    1. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    2. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    3. Shashwati Banerjee & Kishor Goswami, 2020. "Self-employed or Paid Employed: Who can Earn more among the Slum Dwellers and Why?," Progress in Development Studies, , vol. 20(1), pages 7-25, January.
    4. Jean-Marc Zogheib & Marc Bourreau, 2021. "Public vs. Private Investments In Network Industries," EconomiX Working Papers 2021-4, University of Paris Nanterre, EconomiX.
    5. Annabelle Mourougane & Balazs Egert & Mark Baker & Gábor Fülöp, 2020. "The Policy Drivers of Self-Employment: New Evidence from Europe," CESifo Working Paper Series 8780, CESifo.
    6. repec:spo:wpmain:info:hdl:2441/8812 is not listed on IDEAS
    7. Raquel Carrasco & Virginia Hernanz, 2022. "Dependent self-employment across Europe: involuntariness, country’s wealth and labour market institutions," Applied Economics, Taylor & Francis Journals, vol. 54(14), pages 1568-1583, March.
    8. Elisabeth Lopez-Perez & Ana Rodriguez-Santiago & Emilio Congregado, 2020. "Persistence in Self-Employment Rates before the Great Lockdown: The Case of the UK," Sustainability, MDPI, vol. 12(16), pages 1-13, August.
    9. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.
    10. repec:hal:spmain:info:hdl:2441/8812 is not listed on IDEAS
    11. Conen, Wieteke & Schippers, Johannes Jan & Schulze Buschoff, Karin, 2016. "Self-employed without personnel between freedom and insecurity," WSI Studies 05, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    12. Horemans, Jeroen & Marx, Ive, 2017. "Poverty and Material Deprivation among the Self-Employed in Europe: An Exploration of a Relatively Uncharted Landscape," IZA Discussion Papers 11007, Institute of Labor Economics (IZA).
    13. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.

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    More about this item

    Keywords

    Education; Employment protection legislation; Occupational choice; Self-employment;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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