Self–Employment: A Career View
Release Date: Sunday, November 7, 2010
Release Number: 10-08 ADV
Related State:
District of Columbia
Contact: Patrick Morris (202) 205-6941, patrick.morris@sba.gov

New study finds early exposure to self employment raises the chance of self employment in later career

WASHINGTON, D.C. –A study released today by the Office of Advocacy showed that early exposure to self-employment increases individuals’ engagement in self-employment during their early- and mid-career years. The study also found that a younger subgroup has much higher self-employment rates than an older subgroup when the two are compared by age 23. This increase is driven by recent increases in Black and Hispanic self-employment, and to a lesser extent by female self-employment.

The report titled A Longitudinal Analysis of Early Self-employment in the National Longitudinal Surveys of Youth (NLSYs) by Yasuyo Abe and Hannah Betesh, Berkeley Policy Associates and A. Rupa Datta, at University of Chicago found that there is a strong positive link between an indicator of self-employment during ages 20-22 and the self-employment outcome measures in ages 22-41. In addition, total self-employment years are positively cor related with economic outcomes, measured in terms of family income, the individual’s own income, and family net worth. An additional year of self-employ ment increases the level of income and net worth significantly.

“This study helps us understand the dynamics of self-employment, which better helps us understand individual entrepreneurship in the beginning of a person’s career,” said Acting Chief Counsel for Advocacy Susan M. Walthall. “It also analyzes the characteristics of those who have chosen self-employment as career.”

The study uti lizes two NLSYs, one from 1979 and one from 1997. The NLSYs offer extensive information on economic activity, as well as data on personal and family backgrounds, and allow detailed longitudinal investigation of self-employment activities.

For more information and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo.