| Abstract: |
As observed in many advanced economies experiencing an increase of
self-employment rates since the late 1970s, a flourishing small- and
medium-size enterprise sector is traditionally associated with positive
economic development and growth. In the regional context, areas benefiting
from an established entrepreneurial culture are in general more successful and
innovative, as well as better equipped to sustain structural changes and to
contrast unemployment. It is therefore important to investigate the reasons
why individuals choose self-employment, and why they do it despite lower
protection, higher risks, and possibly more effort than what is offered in a
comparable wage employment position. Existing research identifies better
prospects of entrepreneurial earnings as compared to wages as a major
attraction towards self-employment. However, beside pecuniary motivations,
other factors may be considered when it comes to occupational choice, as,
among others, displacement, uncertainty, (the threat of) unemployment, and
(dis-)satisfaction. Building on a job quits model, we propose a representation
of transition behaviour from wage to self-employment which includes subjective
evaluations of pecuniary and nonpecuniary satisfaction on the previous job.
Individual microdata are drawn from the Swiss Household Panel (SHP), and cover
the time period 1999–2008. Additionally, we focus on the dynamics of job
satisfaction in order to highlight the role played by shocks in subjective
evaluations, and introduce their interaction with levels to control for
threshold effects. |