Self-employment and liquidity constraints

Recently, both academic researchers and government have become more interested in self-employment. One reason for this renewed interest is the view that self-employment and entrepreneurship is something very important for the well-being of an economy. This article surveys some of the empirical results regarding self-employment. The emphasis is on the relationship between personal wealth and the decision to become self-employed. The results of this research indicate that wealthier individuals have a higher probability of becoming self-employed. The interpretation is that some individuals are hindered from becoming self-employed due to liquidity constraints.