IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp15825.html
   My bibliography  Save this paper

Human Capital and Self-Employment in India: An Empirical Analysis for Different Cohorts

Author

Listed:
  • Dutta, Nabamita

    (University of Wisconsin, La Crosse)

  • Kar, Saibal

    (Centre for Studies in Social Sciences, Calcutta)

  • Ray, Shaswata

    (Centre for Studies in Social Sciences)

Abstract

The ambiguity in the relationship between self-employment and educational attainment is well documented in the literature. Using an extensive individual level dataset from Periodic Labor Force Survey, we estimate the probability of being self-employed in India based on educational attainments. Our results suggest that the probability of being self-employed rises for an individual with education but not monotonically so. Indeed, the impact of education on likelihood of self-employment does not convey much information without considering how the effect varies across gender, caste, age, household size, religion, and industry as various cohorts chosen for this study using 418,297 observations. The probability to be self-employed varies considerably based on gender, caste and age when the level of education rises. A cohort based analysis for determination of self-employment is novel for India along with the findings where college educated women show higher probability of self-employment than men, for example. The importance of considering the non-linearity in the relationship between self-employment and education, usually part of analytical frameworks but inadequately addressed empirically, should be useful for better policies on the interaction between human capital and occupational choice. Robustness analysis considering further cohort effects in terms of household size and religion, buttresses our benchmark results.

Suggested Citation

  • Dutta, Nabamita & Kar, Saibal & Ray, Shaswata, 2022. "Human Capital and Self-Employment in India: An Empirical Analysis for Different Cohorts," IZA Discussion Papers 15825, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp15825
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp15825.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gustavo Manso, 2011. "Motivating Innovation," Journal of Finance, American Finance Association, vol. 66(5), pages 1823-1860, October.
    2. Erik Monsen & Prashanth Mahagaonkar & Christian Dienes, 2012. "Entrepreneurship in India: the question of occupational transition," Small Business Economics, Springer, vol. 39(2), pages 359-382, September.
    3. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    4. Saul Estrin & Tomasz Mickiewicz, 2011. "Institutions and female entrepreneurship," Small Business Economics, Springer, vol. 37(4), pages 397-415, November.
    5. Cassar, Gavin, 2006. "Entrepreneur opportunity costs and intended venture growth," Journal of Business Venturing, Elsevier, vol. 21(5), pages 610-632, September.
    6. Swamy, Anand & Knack, Stephen & Lee, Young & Azfar, Omar, 2001. "Gender and corruption," Journal of Development Economics, Elsevier, vol. 64(1), pages 25-55, February.
    7. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    8. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 441-493, Elsevier.
    9. Audretsch, David B. & Bönte, Werner & Tamvada, Jagannadha Pawan, 2013. "Religion, social class, and entrepreneurial choice," Journal of Business Venturing, Elsevier, vol. 28(6), pages 774-789.
    10. Baum, Joel A. C. & Silverman, Brian S., 2004. "Picking winners or building them? Alliance, intellectual, and human capital as selection criteria in venture financing and performance of biotechnology startups," Journal of Business Venturing, Elsevier, vol. 19(3), pages 411-436, May.
    11. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    12. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
    13. Ting Zhang & Zoltan Acs, 2018. "Age and entrepreneurship: nuances from entrepreneur types and generation effects," Small Business Economics, Springer, vol. 51(4), pages 773-809, December.
    14. Webster, Allan & Piesse, Jenifer, 2018. "Are Foreign-Owned Firms More Likely to Pay Bribes than Domestic Ones? Evidence from Emerging Markets," World Development, Elsevier, vol. 101(C), pages 142-161.
    15. Dutta, Nabamita & Kar, Saibal & Beladi, Hamid, 2022. "Innovation and Perceived Corruption: A Firm-Level Analysis for India," Business and Politics, Cambridge University Press, vol. 24(2), pages 151-170, June.
    16. Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    17. Braumoeller, Bear F., 2004. "Hypothesis Testing and Multiplicative Interaction Terms," International Organization, Cambridge University Press, vol. 58(4), pages 807-820, October.
    18. Hu, Zhining, 2021. "The effect of income inequality on human capital inequality: Evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 471-489.
    19. Oosterbeek, Hessel & van Praag, Mirjam & Ijsselstein, Auke, 2010. "The impact of entrepreneurship education on entrepreneurship skills and motivation," European Economic Review, Elsevier, vol. 54(3), pages 442-454, April.
    20. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2005. "Entrepreneurship Selection and Performance: A Meta-Analysis of the Impact of Education in Developing Economies," The World Bank Economic Review, World Bank, vol. 19(2), pages 225-261.
    21. Matthew R. Marvel & Justin L. Davis & Curtis R. Sproul, 2016. "Human Capital and Entrepreneurship Research: A Critical Review and Future Directions," Entrepreneurship Theory and Practice, , vol. 40(3), pages 599-626, May.
    22. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(1), pages 63-82, January.
    23. Martin, Bruce C. & McNally, Jeffrey J. & Kay, Michael J., 2013. "Examining the formation of human capital in entrepreneurship: A meta-analysis of entrepreneurship education outcomes," Journal of Business Venturing, Elsevier, vol. 28(2), pages 211-224.
    24. Haber, Sigal & Reichel, Arie, 2007. "The cumulative nature of the entrepreneurial process: The contribution of human capital, planning and environment resources to small venture performance," Journal of Business Venturing, Elsevier, vol. 22(1), pages 119-145, January.
    25. Dutta, Nabamita & Sobel, Russell S., 2021. "Entrepreneurship, fear of failure, and economic policy," European Journal of Political Economy, Elsevier, vol. 66(C).
    26. Farzana Chowdhury & David B. Audretsch & Maksim Belitski, 2019. "Institutions and Entrepreneurship Quality," Entrepreneurship Theory and Practice, , vol. 43(1), pages 51-81, January.
    27. Hamid Beladi & Saibal Kar, 2015. "Skilled and Unskilled Immigrants and Entrepreneurship in a Developed Country," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 666-682, August.
    28. Anne De Bruin & Candida G. Brush & Friederike Welter, 2006. "Introduction to the Special Issue: Towards Building Cumulative Knowledge on Women's Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 30(5), pages 585-593, September.
    29. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dutta, Nabamita & Sobel, Russell S., 2018. "Entrepreneurship and human capital: The role of financial development," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 319-332.
    2. Rosendahl Huber, Laura & Sloof, Randolph & Van Praag, Mirjam & Parker, Simon C., 2020. "Diverse cognitive skills and team performance: A field experiment based on an entrepreneurship education program," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 569-588.
    3. Klyver, Kim & Steffens, Paul & Lomberg, Carina, 2020. "Having your cake and eating it too? A two-stage model of the impact of employment and parallel job search on hybrid nascent entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(5).
    4. Anglin, Aaron H. & Short, Jeremy C. & Drover, Will & Stevenson, Regan M. & McKenny, Aaron F. & Allison, Thomas H., 2018. "The power of positivity? The influence of positive psychological capital language on crowdfunding performance," Journal of Business Venturing, Elsevier, vol. 33(4), pages 470-492.
    5. Unger, Jens M. & Rauch, Andreas & Frese, Michael & Rosenbusch, Nina, 2011. "Human capital and entrepreneurial success: A meta-analytical review," Journal of Business Venturing, Elsevier, vol. 26(3), pages 341-358, May.
    6. Huang, Bin & Tani, Massimiliano & Zhu, Yu, 2021. "Does higher education make you more entrepreneurial? Causal evidence from China," Journal of Business Research, Elsevier, vol. 135(C), pages 543-558.
    7. Antonio Lecuna & Boyd Cohen & Roberto Chavez, 2017. "Characteristics of high-growth entrepreneurs in Latin America," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 141-159, March.
    8. Ralph Hippe & Roger Fouquet, 2024. "The Human Capital Transition and the Role of Policy," Springer Books, in: Claude Diebolt & Michael Haupert (ed.), Handbook of Cliometrics, edition 3, pages 411-457, Springer.
    9. Demeulemeester, Sarah & Hottenrott, Hanna, 2015. "R&D subsidies and firms' cost of debt," DICE Discussion Papers 201, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    10. Bogang Jun & Tai-Yoo Kim, 2017. "Non-financial hurdles for human capital accumulation: landownership in Korea under Japanese rule," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 63-92, January.
    11. Markus Brueckner & Era Dabla Norris & Mark Gradstein, 2015. "National income and its distribution," Journal of Economic Growth, Springer, vol. 20(2), pages 149-175, June.
    12. Peter van der Zwan & Ingrid Verheul & Roy Thurik & Isabel Grilo, 2009. "Entrepreneurial Progress: Climbing the Entrepreneurial Ladder in Europe and the US," Tinbergen Institute Discussion Papers 09-070/3, Tinbergen Institute, revised 17 Mar 2010.
    13. Maryam Khosravi & Mahmood Yahyazadehfar & Mohsen Alizadeh Sani, 2023. "Economic growth and human capital in Iran: A phenomenological study in a major Central Asian economy," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 645-679, June.
    14. Vitantonio Mariella, 2023. "Landownership concentration and human capital accumulation in post-unification Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1695-1764, July.
    15. Cinnirella, Francesco & Hornung, Erik, 2016. "Landownership concentration and the expansion of education," Journal of Development Economics, Elsevier, vol. 121(C), pages 135-152.
    16. Selin Dilli & Gerarda Westerhuis, 2018. "How institutions and gender differences in education shape entrepreneurial activity: a cross-national perspective," Small Business Economics, Springer, vol. 51(2), pages 371-392, August.
    17. Jianhong Zhang & Désirée Gorp & Henk Kievit, 2023. "Digital technology and national entrepreneurship: An ecosystem perspective," The Journal of Technology Transfer, Springer, vol. 48(3), pages 1077-1105, June.
    18. Masatoshi Kato, 2017. "Founders’ human capital and external knowledge sourcing: An absorptive capacity perspective for innovative start-ups," Discussion Paper Series 162, School of Economics, Kwansei Gakuin University, revised Jun 2017.
    19. Gascón Salillas, Patricia, 2020. "La actividad emprendedora: Análisis transversal en la Comunidad Foral de Navarra [Entrepreneurship activity: Cross-sectional analysis in the Region of Navarra]," MPRA Paper 99386, University Library of Munich, Germany.
    20. Justin Van Der Sluis & Mirjam Van Praag & Wim Vijverberg, 2008. "Education And Entrepreneurship Selection And Performance: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 795-841, December.

    More about this item

    Keywords

    Labor Force Survey; education; occupation; self-employment; gender; India;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp15825. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.