Characteristics of self-employment among university graduates

Abstract

In this article, we investigate the characteristics of nonagricultural self-employment (SE) among university graduates in Austria. Probit regressions based on 380 000 observations from the country's 2001 population census indicate that the probability of choosing SE rises significantly with age. We find that men are more likely to be entrepreneurs than women. There are also strong sectoral and regional effects, such as higher probabilities in rural areas. Furthermore, we observe a significant link between the propensity to be self-employed and the type of university degree. Our findings concerning the relationship between citizenship and SE indicate that highly-skilled immigrants from low-wage countries are less likely to be entrepreneurs than native-born citizens and graduates from high-wage countries.

Acknowledgements

We are grateful to Tyler Schaffner for excellent proof-reading.

Notes

¹ The negative correlation between (female) gender and entrepreneurship has recently been confirmed by Ekelund et al. (2005) and Brown et al. (2006). On the relevance of age as a factor explaining SE see, among others, Rees and Shah (1986), Luber et al. (2000) and Georgellis and Wall (2005).

² Here, the agricultural sector is understood to include fishing. It consists of the NACE (Classification of Economic Activities in the European Community) categories 1 through 5.

³ The classification of the regional districts is based on factors like capital intensity, population density and sectoral employment concentration. For a detailed description of the methodology see Palme (1995).

⁴ Other production includes mining, energy and water.

⁵ According to the recession-push theory, bad or worsening perspectives in paid employment push workers towards SE (Taylor, 1996).