Entrepreneurship from scratch : lessons on the entry decision into self-employment from transition economies

This paper exploits the rapid rise in self-employment rates in post-communist Estern Europe as a valuable "quasi-experiment" for understanding th sources of enterpreneurship. A relativ demand-supply model and an individual sectoral choice model are used to analyze a 1993 survey of 27000 adults in six transition economies. Cross-country variation in predicted self-employment entry rates and relative earnings provide evidence on the demand and supply factors affecting the decision to become an entrepreneur.