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The Determinants of Selection into Non-agricultural Self-employment in Ghana

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  • James Heintz
  • Lynda Pickbourn

Abstract

Selection into informal employment is frequently theorised as either an individual choice, for example, to avoid taxation or regulation, or as a structural feature of the formal labour market: for example, the rationing of opportunities prevents free entry into formal employment. However, participation in informal employment can also be understood as the outcome of choices made in the context of structural constraints outside the labour market. Such constraints include the distribution of assets, access to education, responsibilities for unpaid care work and social norms, among others. This article uses data from the Fifth Round of the Ghana Living Standards Survey (GLSS 5) to examine the determinants of selection into self-employment in non-agricultural household enterprises. The Fifth Round of the GLSS was administered with a special focus on non-agricultural household enterprises and provides a rich set of information on informal self-employment outside of agriculture. By considering a range of factors at the individual and household levels, the results of the data analysis will present a more nuanced view of participation in informal self-employment. JEL Classifications : J21, J24, O17, O55

Suggested Citation

  • James Heintz & Lynda Pickbourn, 2012. "The Determinants of Selection into Non-agricultural Self-employment in Ghana," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(2), pages 181-209, May.
    • Handle: RePEc:sae:mareco:v:6:y:2012:i:2:p:181-209
    DOI: 10.1177/097380101200600205
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    References listed on IDEAS

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    1. Loayza, Norman V. & Rigolini, Jamele, 2006. "Informality trends and cycles," Policy Research Working Paper Series 4078, The World Bank.
    2. James Heintz & Gerald Epstein, 2006. "Monetary Policy and Financial Sector Reform For Employment Creation and Poverty Reduction in Ghana," Working Papers wp113, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. Haan, Hans Christiaan., 2002. "Training for work in the informal sector : new evidence from Kenya, Tanzania and Uganda," ILO Working Papers 993580143402676, International Labour Organization.
    4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    5. M. W. Warner & R. M. Al‐Hassan & J. G. Kydd, 1997. "Beyond Gender Roles? Conceptualizing the Social and Economic Lives of Rural Peoples in Sub‐Saharan Africa," Development and Change, International Institute of Social Studies, vol. 28(1), pages 143-168, January.
    6. Kati Schindler, 2010. "Credit for What? Informal Credit as a Coping Strategy of Market Women in Northern Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 234-253.
    7. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    8. Gerald Epstein & James Heintz, 2006. "Monetary Policy and Financial Sector Reform for Employment Creation and Poverty Reduction in Ghana," Research Report 2, International Policy Centre for Inclusive Growth.
    9. James Heintz & Dorrit Posel, 2008. "Revisiting Informal Employment And Segmentation In The South African Labour Market," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 26-44, March.
    10. repec:ilo:ilowps:358014 is not listed on IDEAS
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    Cited by:

    1. Jonathan Lain, 2019. "Discrimination in a search and matching model with self-employment," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-35, December.
    2. Heinz, James & Kabeer, Naila & Mahmud, Simeen, 2017. "Cultural norms, economic incentives and women's labour market behaviour: Empirical insights from Bangladesh," LSE Research Online Documents on Economics 84316, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Informal Employment; Labour Market; Social Structures of Constraint; Ghana;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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