Survival of the Fittest? An Analysis of Self‐Employment Duration in Britain

Abstract

This paper uses data from the British Household Panel Survey to investigate the duration of self‐employment spells in Britain. The results suggest that 40% of self‐employment ventures started since 1991 have not survived their first year in business. Evidence is produced showing that a substantial proportion of self‐employment spells are not terminated through bankruptcy, but through moves to alternative employment. The fittest, in terms of self‐employment survival, are those with no previous unemployment experience but with some work experience, who quit their previous job, and who entered self‐employment with some initial capital.