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Cynicism Starts Young: Age and Entrepreneurship over Transition

Abstract

Studies of self-employment determinants in developed market economies comprise the effects of business cycle, changing social structures or legal framework, industrial organization regulations and government policies. This paper contributes to the literature by analysing the cyclical patterns of self-employment determinants taking into account both the trends associated with the transition and the variability induced by economic and labour market fluctuations. We construct a consistent panel of entrepreneurship choice models based on consecutive quarterly labour force surveys for Poland - a country with nearly highest self-employment rates in CEECs and the EU - across the time span 1995q1-2008q4 and trace changes in the marginal effects estimators. We find that the notion of self-employment as survival strategy emphasised previously in the literature exhibits stronger in the periods of the labour market contraction. We also demonstrate that young university graduates prefer wage employment to entrepreneurship.self-employment, transition, cyclicality, selection models

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