Characteristics of self-employment: A refuge from unemployment or road to entrepreneurship

Abstract

This paper investigates the characteristics of self-employment in a transitional economy, drawing upon Riinvest’s Labour Force and Household Survey evidence from Kosova. Findings based on multinomial logit analysis distinguish employers (i.e., business owners) from own-account workers (i.e., selfemployed) and compare both groups to employees. The paper finds that a switch to own-account workers status is used by individuals as a fallback option to escape unemployment. Individuals may be pushed into own-account status by a lack of work opportunities. Findings also show that remittances have a negative relationship with self-employment. Statistical tests reject the pooling of any of these categories, suggesting significant differences in characteristics of employers and the self-employed.