The Effect of Human Capital on Self-Employment and the Difference between Opportunity and Necessity Self-Employment: a study focusing on Western Europe

This thesis looks into different characteristics and determinants of self-employment. Furthermore, a distinction will be made between opportunity and necessity self-employment. I ought to find the effect of human capital, consisting of education and experience, on (opportunity) self-employment when controlling for demographic and perceptual variables. This relationship is important since Kuratko (2005) showed that self-employment can be taught. The effect of education on self-employment is mostly important in the high-wage sector (Honig, 1996) and therefore the study focuses on Western Europe. This includes Austria, Belgium, France, Germany, Ireland, the Netherlands, Switzerland and the United Kingdom. The results reveal that self-employed individuals have more human capital compared to wage workers. However, the results for opportunity versus necessity self-employment are inconclusive. Moreover, some demographic variables have a somewhat surprisingly effect on self-employment.