| By: |
Frijters, Paul (University of Queensland);
Kong, Tao (Australian National University);
Meng, Xin (Australian National University) |
| Abstract: |
We use a unique data of representative migrants and urban local workers in 15
Chinese cities to investigate entrepreneurship and credit constraints under
labour market discrimination. We divide self employed into prefer to be
self-employed and prefer to have a salaried job but cannot find one; and
divide salaried workers into want-to-be entrepreneurs and happy-to-be salaried
workers. Over 40 percent of migrant workers are either currently or want-to-be
entrepreneurs. Both groups are very similar in terms of risk taking
preferences and network size. Want-to-be entrepreneurs however suffer from
credit constraints identified by negative financial shocks in the year before.
Our back-of-envelope calculation reveals that overcoming the current level of
credit constraints may be worth 2% of GDP per year direct earnings increases. |
| Keywords: |
entrepreneurs, credit constraints, migration, China |
| JEL: |
L26 J14 J70 |
| Date: |
2011–09 |
| URL: |
http://d.repec.org/n?u=RePEc:iza:izadps:dp5967&r=cna |