Entrepreneurship and economic mobility: A case Study of Bolivia
  • Year :
    Paul M. Villarroel Via, Werner L. Hrnani Limarino, Ahmed Eid

    This paper, "Entrepreneurship and economic mobility: A case Study of Bolivia", studies the relationship between entrepreneurship, economic mobility and income class in one of the most informal countries in the world: Bolivia. We argue that entrepreneurs should be defined not only by the act of undertaking a business venture but also by the motivation to pursue a profit opportunity and show that both, tenure profiles and mobility premiums in hourly and monthly labor earnings, reveal that not all people who provide employment for themselves are pursuing a profit opportunity. On the contrary, most self-employed workers (own account and cooperative) began a business venture only to have a job and earn a living, and only for a handful self-employed workers who create at least one source of employment (employers), a salaried job in the formal sector is not unambiguously a superior alternative. Once we identify a set of “true” entrepreneurs, we use panel and pseudo panel data to analyze their economic mobility relative to other types of self-employed workers and to paid-employed workers.