This paper aims to study the impact of micro-level socio-economic, demographic and geographical factors on the likelihood of self-employment entry of young adults in Palestine and filling a gap in the analysis of determinants of self-employment for young adults in Palestine.
The research design is based on a multinomial logistic (MNL) model and on the testing of seven hypotheses deriving from the review of the theoretical and empirical literature, using a micro-level longitudinal data set from the Palestinian Labour Force Surveys (PLFS) between 2009 and 2016. In the analysis, the dependent variable (employment status) is a discrete variable that takes four unordered and independent outcomes: wage employee, self-employed, employer and unpaid family member.
This study has strong evidence that the likelihood of self-employment increases with age. However, results are inconsistent with the well-known curvilinear relationship between age and self-employment. Regarding the role of gender, results show that young men are more likely to become self-employed than young women. Results indicate that there is a significant and negative impact of an increasing level of education on self-employment entry for both youth and the whole population. On the opposite, training after graduation increases the likelihood of self-employment entry for youth with high education level. Besides, this paper finds that young workers living in urban areas have more likelihood to enter self-employment than those in rural areas and young workers in Gaza have more likelihood to enter self-employment than their counterparts in West Bank.
First, in both West Bank and Gaza, young women are less inclined to actively engage in self-employment, which confirms structural inequalities between men and women. Therefore, this study calls for social protection programmes and for national programmes that would promote and develop women’s self-employment. Second, because this paper finds that youth self-employment is more an opportunity-driven phenomenon than a necessity-driven one, this study calls for programmes that provide youth with small business grants and training on entrepreneurship and business models.
Insights are valuable as both government institutions and universities and entrepreneurial startups can benefit from knowing which factors contribute to the self-employment likelihood of youth in Palestine and use the policy recommendations to develop capacity-building programmes to provide the youth and women with skills and competencies which enable them to turn to self-employment.
The authors would like to acknowledge Palestinian American Research Center (PARC) for its financial support to carry out this project.
Morrar, R., Amara, M. and Syed Zwick, H. (2022), "The determinants of self-employment entry of Palestinian youth", Journal of Entrepreneurship in Emerging Economies, Vol. 14 No. 1, pp. 23-44. https://doi.org/10.1108/JEEE-06-2020-0184
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