Tabea Lakemann

How Vulnerable are the Self-Employed?: Evidence from Ugandan Small-Scale Entrepreneurs

Journal of Development Studies, The | 2023


  • Abstract

    Due to small firm sizes and inter-linkages between household and business finances, small-scale entrepreneurs in developing countries are inherently vulnerable to temporary and permanent income shortfalls, and hence household poverty. While the International Labour Organisation (ILO) generally defines self-employment without employees as vulnerable employment, little empirical research has been done on the extent to which the self-employed are indeed vulnerable. This paper makes two main contributions: first, it operationalises the concept of vulnerability in the context of self-employment in developing countries by defining vulnerability as the risk of having business income below a living wage threshold. Secondly, it investigates the extent and correlates of vulnerability. Using a six-year balanced entrepreneur panel dataset from Kampala, Uganda, it is shown that the self-employed are heterogeneous with respect to vulnerability and observed earnings: 58–74% of the samples are classified as vulnerable in a given year and mostly earn incomes below the living wage threshold. Vulnerable entrepreneurs are shown to be significantly different from non-vulnerable entrepreneurs in several dimensions, including those that do not directly predict income.

    Forschungsschwerpunkte

    Journal

    Journal of Development Studies, The

    Jahrgang/Band

    59

    Nummer

    9

    Seiten

    1391-1408

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