Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Over half of all workers in the developing world are self-employed. Although some selfemployment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of selfemployment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment, and labor market institutions. However, self-employment in the developing world tends to be low productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes. In the developing world, wage employment is often the exception rather than the norm. 1 In the least developed countries, agriculture, often based in family farms with unpaid labor, can make up the majority of employment. As households migrate to urban areas and countries develop, nonagricultural self-employment often picks up where agricultural employment left off. Only as countries move up the development scale does wage employment become a large share of total employment. Accordingly, the World Bank's 2013 World Development Report, which focused on jobs, paid a significant amount of attention to the question of self-employment and entrepreneurship in the developing world.
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D I S C U S S I O N P A P E R S E R I E SThe ubiquity of self-employment in low-and middle-income countries raises several important questions that this paper seeks to answer. First, how much self-employment is there in the developing world? Second, is self-employment in these countries a choice or a constraint? Third, to what extent does self-employment in the developing world correspond to the idea of "entrepreneurship"? And finally, from a normative perspective, is so much self-employment a good thing for developing countries? This paper addresses each of these questions by summarizing the wide academic literature on self-employment and development and presents additional evidence to provide a more complete picture where empirical evidence is more limited. The approach adopted here allies theoretical arguments (in particular, with respect to the "choice or constraint" question) with empirical results so as to provide a more complete vision of each issue.The structure of this paper follows the four questions above. Section 1 takes a detailed look at the data to describe the prevalence o...
