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On the nature of micro-entrepreneurship: evidence from Argentina

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  • Gabriel V. Montes Rojas
  • Lucas Siga

Abstract

We analyse the nature of micro-entrepreneurship in Argentina. We focus on whether the sector resembles its counterpart in industrialized countries, characterized by the risk-taking nature of the entrepreneurial activity, or if it is the result of labour market distortions and disguised unemployment, as in the dual economy hypothesis. Our results suggest a segmentation of the micro-entrepreneur sector. Both young uneducated and middle aged highly educated salaried workers have the highest likelihood of becoming entrepreneurs. However, the first segment has a high probability of becoming own-account workers, while the probability of becoming micro-entrepreneurs with employees is strictly increasing in both age and education. Moreover, the probability of entrepreneur failure (as measured by the transition to the salaried sector) has an inverted U shape, implying that both high and low skill individuals are more likely to remain entrepreneurs.

Suggested Citation

  • Gabriel V. Montes Rojas & Lucas Siga, 2009. "On the nature of micro-entrepreneurship: evidence from Argentina," Applied Economics, Taylor & Francis Journals, vol. 41(21), pages 2667-2680.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:21:p:2667-2680
    DOI: 10.1080/00036840701335553
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    2. World Bank, 2009. "Mexico - Improving Productivity for the Urban Poor," World Bank Publications - Reports 3047, The World Bank Group.
    3. Federico S. Mandelman & Gabriel Montes-Rojas, 2007. "Microentrepreneurship and the business cycle: is self-employment a desired outcome?," FRB Atlanta Working Paper 2007-15, Federal Reserve Bank of Atlanta.
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