Self-Employment, Educational Attainment and Employment Protection Legislation

39 Pages Posted: 21 Mar 2012

See all articles by Tobias Brändle

Tobias Brändle

University of Tuebingen; Institute for Applied Economic Research (IAW)

Florian Baumann

University of Tuebingen - Faculty of Economics and Business Administration

Date Written: February 7, 2012

Abstract

We analyse how educational attainment and employment protection influence an individual’s decision to become self-employed. By altering expected income from dependent employment, employment protection is likely to affect an individual’s choice of occupation, although such a link has not been established in the literature so far. We argue that an interaction between an individual’s educational attainment and the institution of employment protection exists when it comes to the decision regarding whether to become self-employed. Based on survey data from OECD countries, we find evidence for such a negative interaction, and find that only after taking this interaction into account can the effect of employment protection on self-employment rates be assessed.

Keywords: education, employment protection legislation, occupational choice, self- employment

JEL Classification: J24, J63

Suggested Citation

Brändle, Tobias and Baumann, Florian, Self-Employment, Educational Attainment and Employment Protection Legislation (February 7, 2012). Available at SSRN: https://ssrn.com/abstract=2026498 or http://dx.doi.org/10.2139/ssrn.2026498

Tobias Brändle (Contact Author)

University of Tuebingen ( email )

Melanchthonstraße 30
Tuebingen, 72074
Germany

Institute for Applied Economic Research (IAW) ( email )

Ob dem Himmelreich 1
Tubingen, 72074
Germany

Florian Baumann

University of Tuebingen - Faculty of Economics and Business Administration ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany

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