Occupational Choice and Self-Employment — Are They Related?

43 Pages Posted: 23 Jan 2013

See all articles by Alina Sorgner

Alina Sorgner

University of Jena

Michael Fritsch

University of Jena - School of Economics and Business Administration

Date Written: January 1, 2013

Abstract

Often, a person will become an entrepreneur only after a period of dependent employment, suggesting that occupational choices precede entrepreneurial choices. We investigate the relationship between occupational choice and self-employment. The findings suggest that the occupational choice of future entrepreneurs at the time of labor market entry is partly guided by a taste for skill variety, the prospect of high earnings, and occupational earnings risk. Entrepreneurial intentions may also emerge after gaining work experience in a chosen occupation. We find that occupations characterized by high levels of unemployment and earnings risk, relatively many job opportunities, and high self-employment rates foster the founding of an own business. Also, people who fail to achieve an occupation-specific income have a tendency for self-employment.

Keywords: Entrepreneurial choice, occupation-specific determinants of entrepreneurship, risk preferences, taste for variety

JEL Classification: L26, J24, D01

Suggested Citation

Sorgner, Alina and Fritsch, Michael, Occupational Choice and Self-Employment — Are They Related? (January 1, 2013). SOEPpaper No. 533, Available at SSRN: https://ssrn.com/abstract=2205034 or http://dx.doi.org/10.2139/ssrn.2205034

Alina Sorgner

University of Jena ( email )

Fürstengraben 1
Jena, 07743
Germany

Michael Fritsch (Contact Author)

University of Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

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