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Employment Transitions among the self-employed during the Great Recession

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  • Beckhusen, Julia

Abstract

Entrepreneurs base their decision to start a business on a range of factors, from age, education and assets to macroeconomic conditions. While the majority of these factors have a well-understood impact on entering and exiting self-employment, the effect of macroeconomic conditions is less clear. During periods of recession, self-employment may increase due to its attractiveness as an alternative to unemployment. However, the difficulty of maintaining a business through the downturn can lead to a decrease in the self-employed. Understanding the transitions in and out of self-employment would help us better appreciate how entrepreneurs experience recessions. We use a robust set of longitudinal data from the Survey of Income and Program Participation (SIPP) to analyze the movements between self-employment, unemployment and wage-work during the Great Recession. The results suggest that the probability of entering self-employment depends on characteristics of the individual while movements out of self-employment are contingent on characteristics of the business. Furthermore, transitions from unemployment to self-employment increased during the recession months and transitions from self-employment to wage-work increased in the post recession months.

Suggested Citation

  • Beckhusen, Julia, 2014. "Employment Transitions among the self-employed during the Great Recession," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170114, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea14:170114
    DOI: 10.22004/ag.econ.170114
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    References listed on IDEAS

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    Cited by:

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    2. Jacqueline Chattopadhyay, 2018. "State Health Insurance Regulation and Self-Employment Rates After the Great Recession: The Role of Guaranteed Issue Mandates," Economic Development Quarterly, , vol. 32(1), pages 78-92, February.
    3. Gänser-Stickler, Gertraud M. & Schulz, Matthias & Schwens, Christian, 2022. "Sitting on the fence - Untangling the role of uncertainty in entrepreneurship and paid employment for hybrid entry," Journal of Business Venturing, Elsevier, vol. 37(2).
    4. Cal J Halvorsen & Yu-Chih Chen, 2019. "The diversity of interest in later-life entrepreneurship: Results from a nationally representative survey of Americans aged 50 to 70," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-21, June.

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