Who becomes self-employed: comparative analysis of Lithuania and Latvia

Abstract

A decision to change one’s status from a hired employee or unemployed person to that of a self-employed person is extremely important in such countries with small economies as Lithuania or Latvia. Previous research (Startien and Remeikien 2012) revealed that self-employment in Lithuania is treated as an alternative to escape unemployment but not as an opportunity to find new business niches or implement one’s dreams. Latvia, however, demonstrates a different approach. According to the data of Global Entrepreneurship Monitor (2012) and Krumina (2013), it took the second position from all the EU countries given the share of its population’s activity in the early-stage entrepreneurial activity. In general Lithuania and Latvia may be treated as similar countries in terms of the level of their economic development and culture. That is why the aim of the article is to assess, which group of people (hired employees or unemployed) are more inclined to self-employment in Latvia, and carry out a comparative analysis of the results of the research in Latvia and Lithuania on this topic.