The Formation and Reproduction of Self employment in a Developing Economy: An Analysis of Job-Shift Rates in the South Korean Urban Labor Market

Abstract

Contrary to the advanced Western capitalist countries, South Korea, a rapidly growing economy, still maintains a significant proportion of self-employment which occupies more than 30 percent of the non-agricultural employment. In this paper, the job-shift rates between the self-employment sector and conventional employment in the organized sector are analyzed using job histories of 445 individuals. As a useful method, the competing risks model and the conditional probability model are tested. The result shows that when a person quits a conventional job in the organized sector, one confronts an equal chance to choose the next job in both sectors, whereas when one quits a self-employment job one has more chance to find the next job in the organized sector as an employee, especially when one is not successful in self-employment. The result shows that there is actually no barrier to entering the self-employment sector, but reproducing self-employment is a very selective and competitive process. The theoretical and methodological implications of these findings are discussed.