| By: |
Giulietti, Corrado (IZA);
Ning, Guangjie (Nankai University);
Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: |
This paper focuses on the determinants of self-employment among rural to urban
migrants in China. Two self-selection mechanisms are analysed: the first
relates to the manner in which migrants choose self-employment or paid work
based on the potential gains from either type of employment; the second takes
into account that the determinants of the migration decision can be correlated
with employment choices. Using data from the 2008 Rural-Urban Migration in
China and Indonesia (RUMiCI) survey, a selection model with endogenous
switching is estimated. Earnings estimates are then used to derive the wage
differential, which in turn is used to model the employment choice. The
procedure is extended to account for migration selectivity and to compare
individuals with different migration background and employment histories. The
results indicate that self-employed individuals are positively selected with
respect to their unobserved characteristics. Furthermore, the wage
differential is found to be an important driver of the self-employment choice. |
| Keywords: |
self-employment, wages, rural to urban migration, selection bias magnets, European Union |
| JEL: |
J23 J61 O15 |
| Date: |
2011–06 |
| URL: |
http://d.repec.org/n?u=RePEc:iza:izadps:dp5805&r=cna |