Who Are the Microenterprise Owners? Evidence from Sri Lanka on Tokman v. de Soto
Is the vast army of the self-employed in low income countries a source of employment generation? This paper uses data from surveys in Sri Lanka to compare the characteristics of own account workers (non-employers) with wage workers and with owners...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/05/9474330/microenterprise-owners-evidence-sri-lanka-tokman-v-de-soto http://hdl.handle.net/10986/6696 |
| Summary: | Is the vast army of the self-employed in
low income countries a source of employment generation? This
paper uses data from surveys in Sri Lanka to compare the
characteristics of own account workers (non-employers) with
wage workers and with owners of larger firms. The authors
use a rich set of measures of background, ability, and
attitudes, including lottery experiments measuring risk
attitudes. Consistent with the International Labor
Organization's views of the self employed (represented
by Tokman), the analysis finds that two-thirds to
three-quarters of the own account workers have
characteristics which are more like wage workers than larger
firm owners. This suggests the majority of the own account
workers are unlikely to become employers. Using a two and a
half year panel of enterprises, the authors show that the
minority of own account workers who are more like larger
firm owners are more likely to expand by adding paid
employees. The results suggest that finance is not the sole
constraint to growth of microenterprises, and provides an
explanation for the low rates of growth of enterprises
supported by microlending. |
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