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The Impact of Macro-Economic Conditions on Transitions into and Duration of Self-Employment

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Title: The Impact of Macro-Economic Conditions on Transitions into and Duration of Self-Employment
Author: Bui, Kathleen
Advisor: Cichello, Paul
Department: Haverford College. Dept. of Economics
Type: Thesis (B.A.)
Issue Date: 2011
Abstract: This paper aims to explore the nature of US self-employment, specifically the role of macro-economic conditions on the individual’s decision to become and remain self-employed. Using micro-level data from the Panel Study of Income Dynamics we first examine the impact of both state unemployment rates and state GDP growth rates on the individual’s propensity to transition into self employment. We find that self-employment is positively related to GDP growth, suggesting that demand prospects attract individuals to start their own business. However, for the male population, we find evidence that individuals create their own jobs as a reaction to weak labor market prospects. Unemployment rates are found to be correlated to the probability of transitioning into self-employment. Furthermore, once self-employed, an increase in unemployment rates is found to extend the individual’s duration in self-employment. Self-employment can therefore potentially be viewed as a refuge from unemployment. Therefore both “push” and “pull” motivations may be working concurrently within self-employment.
Subject: Self-employed -- United States -- Sex differences
Subject: Self-employed -- United States -- Economic aspects
Subject: Self-employed -- United States
Terms of Use: http://creativecommons.org/licenses/by-nc/3.0/us/
Permanent URL: http://hdl.handle.net/10066/6920

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2011BuiK_thesis.pdf Thesis (Haverford users only) 674.3Kb PDF

Citation

Bui, Kathleen. "The Impact of Macro-Economic Conditions on Transitions into and Duration of Self-Employment". 2011. Available electronically from http://hdl.handle.net/10066/6920.

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http://creativecommons.org/licenses/by-nc/3.0/us/ Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc/3.0/us/

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