Are the self-employed at a higher poverty risk: empirical evidence from Serbian silc data

Keywords: economic activity, poverty, self-employment, Serbia, SILC

Abstract


Self-employment constitutes a significant share of the workforce in Serbia. Due to the equally high poverty as well as self-employment rates in Serbia, this paper aims to examine whether there is any prevalence between the two. Moreover, it also seeks to investigate what detriments exist within self-employment that keep or lead to poverty among self-employed people. The research is based on both longitudinal and cross-sectional SILC data. The main results indicated higher poverty exposure for solo entrepreneurs and those employed in family enterprises. Businesses run by men, low-skilled individuals, and young entrepreneurs are all at a much higher risk of poverty than other entrepreneurs or employees, especially those represented by women and highly educated individuals. The paper provides significant inputs for (1) managing differences within the active population at risk of income poverty and (2) monitoring outcomes of the self-employed, given that more than half of them are involved in the agricultural sector. 

 

References

Adamczyk, A., Neneman, J., & Morawski, L. (2018). Why do We Need Self-Employed Persons? Some Economic Reflections, Mainly Tax Related Ones. Center for Social and Economic Research. CASE Research Paper No. 159.

Albulescu, C. T., & Drăghici. A. (2016). Entrepreneurial activity and national innovative capacity in selected European countries. The International Journal of Entrepreneurship and Innovation, 17 (3), 155-172. 

Andrić, V., & Minović, J. (2018). Public debt growth, great recession and fiscal consolidation: The Serbian episode. Serbian Journal of Management, 13 (2), 251-262. 

Angel, S., Heuberger, R., & Lamei, N. (2018). Differences between household income from surveys and registers and how these affect the poverty headcount: evidence from the Austrian SILC. Social Indicators Research, 138, 575–603. 

Astebro, T., & Chen, J. (2014). The entrepreneurial earnings puzzle: mismeasurement or real? Journal of Business Venturing, 29 (1), 88-105. 

Banerjee, S., & Goswami, K. (2020). Self-employed or paid employed: Who can earn more among the slum dwellers and why? Progress in Development Studies, 20 (1), 7-25. 

Blanchflower, D. G. (2000). Self-employment in OECD countries. Labour Economics, 7, 471–505.

Bradshaw, J., Bennett, F., & Mayhew, E. (2010). In-Work Poverty and Labour Market Segmentation: A Study of National Policies, United Kingdom. European Commission, DG Employment, Social Affairs and  Social Affairs and Inclusion. 

Brandolini, A., & Rosolia, A. (2017). The Euro area wage distribution over the crisis. In Anthony, A. B., Guio, A.-C., & Marlier E. (Eds.), Monitoring social inclusion in Europe. Luxembourg: Publications Office of the European Union. 317-332.

Branyiczki, R. (2015). Employment, Education and Other Means of Reducing Poverty. European Commission. EC Research Note No. 4. Retrieved from https://ec.europa.eu/social/BlobServlet?docId=15126&langId=en

Caliendo, M., & Kunn, S. (2011). Start-up subsidies for the unemployed: Long-term effectiveness and effect heterogeneity. Journal of Public Economics, 95 (3-4), 311-331.

Cappellari, L., & Jenkins, S. P. (2004). Modelling low income transitions. Journal of Applied Econometrics, 19 (5), 593–610. 

Crettaz, E. (2011). Fighting working poverty in post-industrial economies: Causes trade-offs and policy solutions. Edward Elgar. Cheltenham.

Eurofound. (2017). Exploring self-employment in the European Union. Publications Office of the European Union, Luxembourg.

Eurostat. (2017). Methodological guidelines and description of EU SILC target variables: DocSILC065 (2017 operation). Available at https://circabc.europa.eu/webdav/CircaBC/ESTAT/eusilc/Library/guidelines_questionnaire/2017%20Oparation%20Guidelines/DOCSILC065%20operation%202017-%2022-05-2017.pdf 

Fritsch, M., Sorgner, A., & Wyrwich, M. (2018). Self-Employment and Well-Being Across Institutional Contexts. Jena Economic Research Papers, 2018-005. 

Fritsch, M., Sorgner, A., & Wyrwich, M. (2019). Self-employment and well-being across institutional contexts. Journal of Business Venturing, 34 (6), 105946.  

Goerne, A. (2011). A Comparative analysis of in-work poverty in the European Union. Fraser, N., Gutiérrez, R., & Peña-Casaan, R. (Eds.), Working poverty in Europe: A comparative approach. Palgrave Macmillan. Basingstoke. 15–45.

Halleröd, B., Ekbrand, H., & Bengtsson M. (2015). In-work poverty and labour market trajectories: Poverty risks among the working population in 22 European countries. Journal of European Social Policy, 25 (5), 473-488. 

Horemans, J., & Marx, I. (2017). Poverty and material deprivation among the self-employed in Europe: An exploration of a relatively uncharted landscape. Institute of Labor Economics. IZA Discussion Paper No. 11007. 

ILO. (2016). Non-standard employment around the world: understanding challenges, shaping prospects. International Labor Organization. Geneva.

Lohmann, H., & Marx, I. (2008). The different faces of in-work poverty across welfare state regimes. Andreß, H.-J., & Lohmann H. (Eds.), The working poor in Europe: Employment, poverty and globalisation. Edward Elgar, Cheltenham. 17–46.

McKnight, A., Stewart, K., Himmelweit, S.M., & Palillo, M. (2016). Low pay and in-work poverty: preventative measures and preventative approaches. Publications Office of the European Union, Luxembourg.  

Mijatović, B. (2017). Monitoring of social inclusion in the Republic of Serbia - Indicators of financial poverty and inequality. Team for social inclusion and poverty reduction of the Government of the Republic of Serbia. Belgrade. (in Serbian). 

Mussida, C., & Parisi, M. L. (2020). Risk of poverty in Southern Europe. Metroeconomica, 71, 294–315. 

National Bank of the Republic of Serbia. (2021).  Available at https://nbs.rs/sr_RS/drugi-nivo-navigacije/statistika/

OECD & European Union. (2017). The missing entrepreneurs 2017: Policies for inclusive entrepreneurs.  OECD Publishing, Paris. 

Ognjenović, K., & Pavlović, D. (2021). SILC in the Republic of Serbia: methodological framework and analysis of selected indicators of poverty and inequality (in Serbian). Institute of Economic Sciences & Team for Social Inclusion and Poverty Reduction of the Government of the Republic of Serbia. Belgrade.

Peña-Casas, R., Ghailani, D., Spasova, S., & Vanhercke, B. (2019). In-work poverty in Europe A study of national policies. European Commission. European Social Policy Network (ESPN). Available at https://ec.europa.eu/social/BlobServlet?docId=21240&langId=en 

Piccarozzi, M., Aquilani, B., & Gatti, C. (2018). Industry 4.0 in management studies: A systematic literature review. Sustainability, 10 (10), 3821. 

Ponthieux, S. (2010). Assessing and analysing in-work poverty risk. Pp. 307-328 in A.B. Anthony & E. Marlier (Eds.), Income and living conditions in Europe. Publications Office of the European Union, Luxembourg.

Rajh, E., Budak, J., Ateljević, J., Davčev, L., Jovanov, T., & Ognjenović, K. (2016). Entrepreneurial intentions in selected Southeast European countries. The Institute of Economics. EIZ Working Paper No. 1609. 

Rajh, E., Jovanov Apasieva, T., Budak, J., Ateljević, J., Davčev, Lj., & Ognjenović, K. (2018). Youth and entrepreneurial intentions in four South-East European countries. International Review of Entrepreneurship, 16 (3), 355-382.

Ray, K., Sissons, P., Jones, K., & Vegeris, S. (2014). Employment, pay and poverty: Evidence and policy review. Joseph Rowntree Foundation. York.

Sánchez-Sellero, M. C., & Garcia-Carro, B. (2020). Which Groups have a greater risk of poverty in Spain? Revija za socijalnu politiku, 27 (1), 19-36. 

SIPRU. (2020). Absolute poverty. Available at http://socijalnoukljucivanje.gov.rs/rs/socijalno-ukljucivanje-u-rs/statistika-siromastva/apsolutno-siromastvo/

Spasova, S., Ghailani, D., Sabato, S., Coster, S., Fronteddu, S., & Vanhercke, B. (2021). Non-standard workers and the self-employed in the EU: social protection during the Covid-19 pandemic. Mimeo, European Union Trade Institute (ETUI). Available at https://etui.org/publications/non-standard-workers-and-self-employed-eu 

Statistical Office of the Republic of Serbia (2020). Database: Labor Force Survey. Available at https://data.stat.gov.rs/?caller=SDDB

Statistical Office of the Republic of Serbia (2021). Database: SILC. Available at https://data.stat.gov.rs/?caller=SDDB

Statistical Office of the Republic of Serbia. (2015-2017). Database: Survey on Income and Living Conditions-SILC. Available at https://data.stat.gov.rs/?languageCode=en-US

Törmälehto, V. M. (2017). High income and affluence: evidence from the European Union statistics on income and living conditions (EU-SILC). Publications Office of the European Union., Luxembourg.

Vrchota, J., & Rehor, P. (2021). Project management in manufacturing enterprises. Serbian Journal of Management, 16 (2), 341-353. 

Wooldridge, J. (2006). Econometric analysis of cross section and panel data. MIT Press. Cambridge, MA, USA.

Published
2022/11/30
Section
Original Scientific Paper