The most commonly studied class of entrepreneurs is those who are self-employed. According to a number of Eurobarometers between years 2001-2006, self-employment was particularly high in countries such as Turkey, Greece, Italy, and Cyprus. For example, self-employment accounted for 46 per cent of workers in Greece.

Most recently, David Blanchflower, Dartmouth College and Andrew Oswald, University of Warwick investigated the relevance of self-employment in a discussion paper for the IZA group. According to these authors, a high number of individuals express a preference for self-employment. Simply, people find self-employment intrinsically attractive.

The next question to ask is who, then, becomes self-employed? Blanchflower and Oswald explore this who question by considering three countries: UK, US, and Canada. The proportion for being self-employed for those aged over 25, in all three countries with age is higher for men. Although in US and Canada, the proportion for selfemployment for old workers rises with education, but it declines with education in the UK.

Furthermore, the self-employment rate in US and Canada is high among the white population, but in the UK these rates are especially high among Asians from India, Pakistan, Bangladesh, and China.

According to Blanchflower, another important determinant of being self-employed is having a self-employed parent. For example, the self-employment proportion in the US is substantially higher among the children of business owners than among the children of non-business owners. A number of other stud ies also show that an individual who had a self-employed parent is roughly two to three times more likely to be self-employed than someone who did not have a self-employed parent.

What about happiness? According to Blanchflower and Oswald, there is some evidence in the literature that the self-em ployed are happier than employees. While reporting life-satisfaction levels, both the younger and older self-employed groups are seen to be happy compared to employees of the same age group. According to these authors, happiness of self-employed is generally U-shaped.

Is there exists a relationship between having capital and being self-employed? There is indeed evidence that the receipt of an inheritance or gift seems to increase a typical individual's self-employed proportion.

Blanchflower and Oswald find a large association between selfemployment and receiving money early on. The inheritance effect is found at age 23 and 33. It is especially large in the former and younger group.

What do we conclude? The first conclusion is that self-employed individuals, a well-defined entrepreneurial group, report markedly greater wellbeing than equivalent employees. Their job satisfaction and life-satisfaction are all higher than workers of identical personal characteristics. While this finding does not tell us how to create more entrepreneurs in society, it does suggest that self-employment brings direct microeconomic benefits to people. However, it raises a puzzle, too: If self-employment does this, why are not more individuals running their own businesses? The second conclusion is that individuals say they would like to be self-employed and the third is that being self-employed means also having a self-employed parent.

(By Varun Dutt, PhD, Carnegie Mellon University, Pittsburgh, PA. Also, Knowledge Editor, Financial Chronicle, New Delhi.)