Determinants of Choice between Wage Employment and Entrepreneurship in Russia

Althought the fact that question of what factors lead individuals to become entrepreneurs is an old one in economics, but only relatively recently has systematic research begun to examine the empirical evidence on these decisions. There is a lack of comprehensive studies of this issue on Russian data. The main objective of this work is to identify and analyze the factors that influence the choice of an individual between entrepreneurship and wage labor on the Russian labor market. As a result of a review of empirical studies, hypotheses are formed about the influence of a particular factor on the likelihood of an individual choosing a form of employment as an entrepreneur. The study examines the relationship of gender, age, education, experience, type of settlement, the presence of minor children, the difference in income and attitude to the risk of the individual with his decision to engage in business. The work involves the use of a two-step procedure of Heckman and the determination of factors affecting the level of wages and separately on the likelihood of becoming an entrepreneur.