Self Employment: The Importance Of Self-Employment?

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Self-employment is explained by the nature of the job that it characterizes. It is “a group of jobs where the remuneration is directly dependent upon the profits (or the potential for profits) derived from the goods and services produced (where own consumption is considered to be part of profits)”. There are four categories of workers who fall in the ambit of self-employment: employers, own-account workers, members of producers' cooperatives, and contributing family workers. Each of these categories can be viewed as, single or multi-member, firms whose profitability owes to owner’s decisions.
The importance of self-employment has been well-researched. It is contended that when the formal sector does not create sufficient employment owing to low growth rate or structural issues, the excess labour is absorbed by the informal sector of the economy which primarily comprises of self-employed . Some researchers argue that self-employment is …show more content…

Evidence from Bahawalpur district, Punjab exhibits that persons in the age group of 44-54 years have a higher probability of getting self-employed as compared to those in the age group of 35-44 years. This is because the former group matures and experiences over time and hence is able to take risks. However, it is possible that they are able to accumulate sufficient capital prior to self-employment that is one of the constraints.
Health can have a paradoxical impact. At times, a person with poor health is likely to engage in self-employment because health-issues make it difficult to fulfil contractual obligations of wage employment. The situation demands a greater flexibility of time management . However, intuitively, one would imagine that self-employment is more exacting and stressful. Therefore, only a healthy individual will opt for this choice, and generally a person with relatively poor health will opt for wage employment which is accompanied by some medical

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