A Longitudinal Analysis of Young Entrepreneurs in Australia and the United States

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This paper examines the pattern of self-employment in Australia and the United States. We particularly focus on the movement of young people in and out of self-employment using comparable longitudinal data from the two countries. We find that the forces that influence whether a person becomes self-employed are broadly similar: in both countries skilled manual workers, males and older workers were particularly likely to move to self-employment. We also find that previous firm size, previous union status and previous earnings are important determinants of transitions to self-employment. The main difference we observe is that additional years of schooling had a positive impact on the probability of being self-employed in the US but were not a significant influence in Australia. However, the factors influencing the probability of leaving self-employment are different across the two countries. The only similarity is that in both countries younger individuals are more likely to leave.

Published: Small Business Economics, Jan 1994, pp. 1-19 (vol. 6, No. 1).

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