Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 845: Using Self-employment as Proxy for Entrepreneurship: Some Empirical Caveats

Carl Magnus Bjuggren (), Dan Johansson () and Mikael Stenkula ()
Additional contact information
Carl Magnus Bjuggren: Linköping University, Postal: and Stockholm School of Economics/EHFF, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Dan Johansson: The Ratio Institute, Postal: P.O. Box 3203, SE-103 64 Stockholm, Sweden
Mikael Stenkula: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: Research on entrepreneurship has received an increased amount of interest in recent years, with self-employment being used as the most common proxy for “entrepreneurship” in empirical studies. However, there are various ways of defining self-employment, making it a somewhat dubious proxy. This may flaw the analysis, especially in cross-country studies, since the documentation of data often is insufficient and difficult to access due to language barriers. We present an analysis of Swedish self-employment data. We show that the measurement of self-employment has changed over time to noticeably affect the reported number of self-employed in the two major statistical sources on self-employment. The reported development of self-employment sometimes differs diametrically depending on source. Sweden is occasionally erroneously reported to show the largest increase in self-employment in cross-country studies. Our study mimics the results of other country-specific analyses and we conclude that well-grounded conclusions require that the advantages and disadvantages of different statistical sources are recognized.

Keywords: Labor Force Survey; RAMS; Self-employed; Self-employment; Entrepreneurship

JEL-codes: C81; C82; L26; M13

16 pages, July 9, 2010

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