The determinants of self-employment entry of Palestinian youth

Abstract

Purpose This paper aims to study the impact of micro-level socio-economic, demographic and geographical factors on the likelihood of self-employment entry of young adults in Palestine and filling a gap in the analysis of determinants of self-employment for young adults in Palestine. Design/methodology/approach The research design is based on a multinomial logistic (MNL) model and on the testing of seven hypotheses deriving from the review of the theoretical and empirical literature, using a micro-level longitudinal data set from the Palestinian Labour Force Surveys (PLFS) between 2009 and 2016. In the analysis, the dependent variable (employment status) is a discrete variable that takes four unordered and independent outcomes: wage employee, self-employed, employer and unpaid family member. Findings This study has strong evidence that the likelihood of self-employment increases with age. However, results are inconsistent with the well-known curvilinear relationship between age and self-employment. Regarding the role of gender, results show that young men are more likely to become self-employed than young women. Results indicate that there is a significant and negative impact of an increasing level of education on self-employment entry for both youth and the whole population. On the opposite, training after graduation increases the likelihood of self-employment entry for youth with high education level. Besides, this paper finds that young workers living in urban areas have more likelihood to enter self-employment than those in rural areas and young workers in Gaza have more likelihood to enter self-employment than their counterparts in West Bank. Practical implications First, in both West Bank and Gaza, young women are less inclined to actively engage in self-employment, which confirms structural inequalities between men and women. Therefore, this study calls for social protection programmes and for national programmes that would promote and develop women’s self-employment. Second, because this paper finds that youth self-employment is more an opportunity-driven phenomenon than a necessity-driven one, this study calls for programmes that provide youth with small business grants and training on entrepreneurship and business models. Originality/value Insights are valuable as both government institutions and universities and entrepreneurial startups can benefit from knowing which factors contribute to the self-employment likelihood of youth in Palestine and use the policy recommendations to develop capacity-building programmes to provide the youth and women with skills and competencies which enable them to turn to self-employment.

Social innovation in extreme institutional contexts: the case of Palestine

“…, 2015; Khatib et al. , 2013; Morrar, 2018; Morrar et al , 2022). Many of the interviewees highlighted the weaknesses in the educational system, which create distortions and make them unsupportive of the SI ecosystem.…”

“…This boundary mainly stems from the cultural-cognitive dilemma of the institutional trap and the institutional void that does not encourage SI. The education system in Palestine is criticized for its weak linkages with society and the real needs of the market (Abu Hanieh et al, 2015;Khatib et al, 2013;Morrar, 2018;Morrar et al, 2022). Many of the interviewees highlighted the weaknesses in the educational system, which create distortions and make them unsupportive of the SI ecosystem.…”

Does the Accumulating Human Capital Determine the Decision to Work as Self-employed? Evidence from Cameroon

“…In the analysis of individual determinants of self-employment entry (see Morrar et al, 2022 ; Dvouletý et al, 2018 ; Parker, 2018 ; Szaban & Skrzek-Lubasińska, 2018 ; Rusu & Roman, 2017 ; Simoes et al, 2016 ; Bosma et al, 2012 ; Dunn & Holtz-Eakin, 2000 ; Evans & Leighton, 1989 ), numerous studies have investigated the relationship between human capital and self-employment choice these recent years. Although considerable challenges are posed by the complex nature of self-employment, human capital has been identified in most works as one of its main determinants.…”

Analysis of determinants of youth self-employment career choices

“…It is conditional upon different development factors, including corruption, government ineffectiveness and the absence of the rule of law (Adelaja and George, 2020). Lack of work experience and structural impediments prevent young people from entering the labour market (Matli and Ngoepe, 2021; Morrar et al. , 2021; Baah-Boateng, 2016).…”

“…It is conditional upon different development factors, including corruption, government ineffectiveness and the absence of the rule of law (Adelaja and George, 2020). Lack of work experience and structural impediments prevent young people from entering the labour market (Matli and Ngoepe, 2021;Morrar et al, 2021;Baah-Boateng, 2016). Simultaneously, migration from rural to urban centres and population growth can be cited as reasons for the growth of the unemployment problem (Onah and Okwuosa, 2016).…”