The Dynamics of Solo Self-Employment: Persistence and Transition to Employership

36 Pages Posted: 19 Jan 2018

See all articles by Daniel S. J. Lechmann

Daniel S. J. Lechmann

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Christoph Wunder

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; University of Bamberg

Date Written: September 2017

Abstract

This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo self-employment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.

Keywords: state dependence, dynamic multinomial logit, solo self-employment, own-account worker, stepping stone, German SOEP

JEL Classification: J23, J62

Suggested Citation

Lechmann, Daniel S. J. and Wunder, Christoph, The Dynamics of Solo Self-Employment: Persistence and Transition to Employership (September 2017). SOEPpaper No. 932, Available at SSRN: https://ssrn.com/abstract=3100870 or http://dx.doi.org/10.2139/ssrn.3100870

Daniel S. J. Lechmann (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Christoph Wunder

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

University of Bamberg ( email )

Feldkirchenstr. 21
Bamberg 96045
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
241
PlumX Metrics