Small Business Economics

, Volume 1, Issue 4, pp 263–272 | Cite as

An empirical analysis of self-employment in the Netherlands

  • Gerrit de Wit
  • Frans A. A. M. van Winden


The choice between self-employment and paidemployment is analyzed empirically using a so-called endogenous switching model. The model features beside the choice equation earnings, equations for self-employed individuals and employees and is estimated using a two stage structural probit method. The model is applied to a unique (Dutch) data set including childhood ability and family background variables. The main findings of the empirical analysis are that the probability of self-employment depends positively on the earnings differential between self- and paid-employment, that a relatively high score on a IQ test applied at the age of 12 increases the likelihood of becoming self-employed, and that the employment status of the father strongly influences the decision to become self-employed.


Empirical Analysis Employment Status Industrial Organization Background Variable Family Background 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Blau David M., 1985, ‘Self-Employment and Self-Selection in Developing Country Labor Markets, Southern Economic Journal 52, 351–363.Google Scholar
  2. Brock William A. and David S. Evans, 1986, The Economics of Small Business: Their Role and Regulation in the U.S. Economy, New York/London: Holmes & Meier.Google Scholar
  3. Brockhaus Robert H.Sr., 1982, ‘The Psychology of the Entrepreneur’, in Calvin A.Kent, Donald L.Sexton, and Karl H.Vesper (eds.), Encyclopedia of Entrepreneurship, New Jersey: Prentice-Hall, Inc.Google Scholar
  4. Evans David S. and Linda S. Leighton, 1989, ‘The Determinants of Changes in U.S. Self-Employment, 1968–1987’, Small Business Economics 1, 111–120.Google Scholar
  5. Hartog, Joop and Hans C. M. van Ophem, 1986, Allocation, Earnings and Efficiency, University of Amsterdam, Faculty of Economics, Research Memorandum 8619.Google Scholar
  6. Hartog Joop and Gerard A. Pfann, 1985, Vervolgonderoek Noordbrabantse zesdeklassers, University of Amsterdam, Faculty of Economics, Amsterdam.Google Scholar
  7. LeeLung-Fei, 1978, ‘Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables’, International Economic Review 19, 415–433.Google Scholar
  8. Long James E., 1982, ‘The Income Tax and Self-Employment’, National Tax Journal 35, 31–42.Google Scholar
  9. Maddala G. S., 1983, Limited-Dependent and Qualitative Variables in Econometrics, Cambridge: Cambridge University Press.Google Scholar
  10. Moore Robert L., 1983, ‘Self-Employment and the Incidence of the Payroll Tax’, National Tax Journal 36, 491–501.Google Scholar
  11. Rees Hedley and Anup Shah, 1986, ‘An Empirical Analysis of Self-Employment in the U.K.’, Journal of Applied Econometrics 1, 95–108.Google Scholar
  12. Vijverberg Wim P. M., 1986, ‘Consistent Estimates of the Wage Equation When Individuals Choose among Income-Earning Activities’, Southern Economic Journal 52, 1028–1042.Google Scholar

Copyright information

© Kluwer Academic Publishers 1989

Authors and Affiliations

  • Gerrit de Wit
    • 1
  • Frans A. A. M. van Winden
    • 1
  1. 1.Department of Micro Economics Faculty of Economics and EconometricsUniversity of AmsterdamAmsterdamThe Netherlands

Personalised recommendations