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International Small Business Journal

DOI: 10.1177/0266242608088741 2008; 26; 323 International Small Business Journal

Ellu Saar and Marge Unt Later Entrants, Quitters and Shuttles

Selective Mobility into Self-employment in Post-socialist Transition: Early Birds,

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Selective Mobility into Self-employment in Post-socialist TransitionEarly Birds, Later Entrants, Quitters and Shuttles

ELLU SAAR AND MARGE UNTTallinn University, Estonia

On the one hand, a self-employed worker may be a successful business owner exploiting new opportunities. At the other extreme, self-employed may be refugees from poverty and unemployment with few resources and few opportunities to earn high incomes. In this article, we address the question about importance of the ‘pull’ and ‘push’ factors into self-employment drawing upon the experience of post-socialist Estonia. The article uses data from various sources (quantitative as well as qualitative). We conclude that the crucial mechanism at play may have been selective mobility into self-employment. At the beginning of the 1990s less educated workers who were working in primary and secondary sectors moved into self-employment more or less for lack of choice. Most more educated self-employed who started their business in the fi rst half of the 1990s moved out from self-employment and became managers in fi rms belonging to the state or other employers. As reforms progressed, the type of people who were moving into self-employment changed.

KEYWORDS: post-socialist countries; privatization; selective mobility; self-employment

Introduction

In the last few years there has been an increased interest in self-employment and entrepreneurship (see, for example, Van Stel and Carree, 2004). One important reason for this seems to be that many view the self-employed as entrepreneurs, who do not only create jobs for themselves, but also for others, and thereby increase employment. Arguments have also been advanced about the higher fl exibility of small and medium-sized enterprises (SME). Thus, self-employment and entrepreneur-ship have been seen as highly dynamic and critical for economic growth.

At one extreme, a self-employed worker may be a successful business owner utilizing new opportunities. At the other extreme, the self-employed may be people seeking a route out of poverty and unemployment, with few resources and few opportunities to earn high incomes (Hanley, 2000). An increase in the self-employment rate may refl ect an environment encouraging job creation and market

International Small Business JournalCopyright © 2008 SAGE Publications

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[DOI:10.1177/0266242608088741]Vol 26(3): 323–349

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development, or it may be a consequence of imperfect adjustment to structural changes (Earle and Sakova, 2000).

In the recent past, several books and articles have interrogated assumptions regarding the stability, inheritance and homogeneity of the self-employed by studying paths into self-employment and factors infl uencing the survival of SMEs (see for example Arum and Müller, 2004; Blanchfl ower, 2000; Brüderl, 1996; Carr, 1996; Lin et al., 2000; McManus, 2000; Müller et al., 2000; Pfeiffer and Reize, 2000; Stanworth and Stanworth, 1997; Walker and Brown, 2004). Previous research has largely concentrated on self-employment in the relatively stable environment in developed industrial countries. Self-employment and the establishment of small businesses in post-socialist countries have received relatively little theoretical and empirical attention. Entrepreneurs, self-employment and SMEs played a very limited part under central planning. In the late 1980s and the early 1990s self-employment not only emerged but also was often encouraged by state policies in many post-socialist countries. Most post-socialist countries lack a recent entrepreneurial trad-ition. The initial growth of private business activity coupled with the implementation of neoliberal transition programmes resulted in a lack of private business support services. The sudden and unanticipated opening of opportunities offers a valuable quasi-experiment that may provide general lessons on the determinants of entrepreneurship.

Whether self-employment represents the ‘entrepreneurial pull’ or the ‘unemploy-ment push’ has important implications for evaluating the success of economic transition in different countries. Both views may be plausible when we consider the changes in post-socialist countries in the 1990s. Rapid liberalization created new opportunities for entrepreneurship, but post-socialist countries have also experienced severe recessions associated with the collapse of the state-owned industrial sector, the rise of unemployment and the fall of the employment rate. Stoica (2004: 253) argues that there are two main factors infl uencing who becomes an entrepreneur: the past socialist regime of a given country, and the specifi city of transition in the country.

Estonia is a special case for studying the establishment of entrepreneurship. First, during Soviet times different sectors in Estonia had served as a kind of testing lab-oratory for Soviet all-union reforms and this seems to have had a positive effect on entrepreneurship in Estonia (Alanen, 2001). Second, the Estonian economic reform has been one of the most radical among post-socialist countries, particularly regarding its highly liberal economic principles and the modest role of the state (De Melo et al., 1996). Estonia is often used as an example of success, especially compared to other former Soviet Union countries (Åslund, 1996; World Bank, 1996).

Wu and Xie (2003) studying transitions into the market sector in China suggested that there was selective mobility into this sector, dependent on the reform stage during which workers entered the market sector. Our previous analysis gives reason to assume that the same mechanism was at play in transitions into self-employment in Estonia as well (Saar and Unt, 2006). This article addresses the question of the factors leading individuals into self-employment during the different stages of the reforms and analyses the factors inducing them to remain active in these kinds of endeavours or to quit self-employment in post-socialist Estonia.

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The article uses data from various sources (quantitative as well as qualitative). Quantitative statistical data (Estonian Labour Force Surveys) are complemented with qualitative data from in-depth interviews conducted in 2003 and 2004 with representatives of the so-called ‘winners’ cohort.1

Entry into Self-employment

As Arum and Müller (2004: 9) mentioned ‘ … an improved understanding of self-employment is possible … through explicitly recognizing individual-level decision-making processes whereby individual characteristics and structural factors affect choices related to entering and exiting self-employment’. The individual decides whether to enter self-employment and to stay self-employed after considering all possible perceived benefi ts and costs. Self-employment allows greater autonomy for individuals, but it also increases the individual’s risks. If the business fails, the individuals may lose their jobs and their savings. The Eurobarometer 2004 survey indicates that 77% of Europeans who stated a preference for entrepreneurship cited greater independence and self-fulfi lment as the most important motivation. Every second European thought that one should not set up a business if it is likely to fail, with the possibility of bankruptcy (45%) or of losing their property (35%) being seen as the main dangers arising if a business fails (European Commission, 2004: 14).

The expression of being either ‘pulled ‘or ‘pushed’ into self-employment has been used extensively in the literature (Arum and Müller, 2004; Brodie and Stanworth, 1998; Hamilton, 1987; Stanworth and Stanworth, 1995). Furthermore, Stanworth and Stanworth (1997: 71) argue ‘that the threshold of transition for those entering self-employment from direct employment operates at a number of levels, rather than the simple two-level “push-pull” model’.

The reforms in post-socialist countries have had a twofold impact on moves into self-employment. On the one hand, reforms made entrepreneurial endeavours possible. On the other, economic transformations served as an environmental push. Among researchers who have devoted their attention to entrepreneurship in post-socialist countries, there is a tendency to view self-employment as refl ecting the inability of a worker to fi nd a satisfactory regular job as an employee (for an overview of this thesis see Hanley, 2000). Supporters of this ‘refuge from poverty’ thesis maintain that self-employment is unlikely to encourage the entrepreneur-ship in a Weberian sense, but just proprietorship.2 Nikula (2004: 129) also argues that in the early days of private entrepreneurship, a large share of enterprises in post-socialist countries belonged to the survival category of entrepreneurship and only a minority could even be classifi ed as the proprietorship type of entrepreneur-ship. Other researchers have treated entrepreneurship as a sign of upward mobility (see for example Nee, 1991).

More plausible seems to be the perspective that maintains that recruitment into different entrepreneurial careers is regulated by different social factors, and that the particular resources helping to establish entrepreneurship are a function of institutional conditions (see Aidis, 2005; Róna-Tas, 1998; Stoica, 2004). Previous empirical analysis seems to support these theses. For example Róbert and

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Bukodi (2004: 272) concluded that the self-employed group in Hungary is hetero-geneous and more mixed than in the developed market economies. Hanley’s (2000) analysis also shows that self-employment in post-socialist Eastern Europe encompasses two distinct class locations: the individually self-employed on the one hand, whose socio-economic status differs little from that of ordinary workers, and employers on the other, who receive income and possess far greater assets than both the individually self-employed and the ordinary workers. Comparative analysis of 11 countries has identifi ed cross-national variation in self-employment (Arum and Müller, 2004).

Wu and Xie (2003) analysing transitions into the market sector in China proposed a typology of workers based on their work histories. Combining information per-taining to a worker’s sector status at two points in time, they came to distinguish between four types of workers. Based on our previous analysis (Saar and Unt, 2006) we suppose that this approach is applicable for studying transitions into and out of self-employment as well. We have elaborated the proposed typology using more than two points of time and connecting these points with the various reform stages and changes in the labour market in post-socialist Estonia.

The fi rst type consists of those who entered self-employment in the early 1990s and have stayed self-employed (‘early birds’). The second type includes those who started self-employment early but later retreated to the category of dependent workers (‘quitters’).3 The third type describes those who transferred into self-employment in the second half of the 1990s or even later (‘later entrants’). The fourth type characterizes individuals who have moved between employment, un-employment and self-employment. They stayed in self-employment only for some years (‘shuttles’). ‘Accidental entrepreneurs’ is a term used by Nikula (2004), which characterizes their short-term orientation and that this type of entrepreneurship was mostly taken on by coincidence. We assume that the composition of these types is different, as is the level of importance that the push and pull factors have had for them. Our typology is quite similar to typology elaborated by Stanworth and Stanworth (1997) for analysis of routes from employment to self-employment in the British book publishing industry.4

Changes in the Estonian Labour Market

Estonia’s nowadays macro-economic success has been built on stable currency, liberal foreign trade regime, liberalization of prices, abolition of state subsidies, fast privatization and effective bankruptcy legislation. As a result, Estonia has advanced fast in terms of stabilizing and restructuring the economy and has been rewarded with high levels of foreign direct investment. Public debt is low and the state budget is essentially in balance.

The time since 1989 has been of decisive importance for understanding the changes in Estonian economy and labour force. In June 1992, Estonia introduced its own currency. This was considered to be the start of serious economic reforms. In 1992, economic activity collapsed under the combined effects of the breakdown of trade relations with the countries of the former Soviet Union, the collapse of the old central planning system, extensive price and trade liberalization, and the abolition

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of many subsidies. Real GDP fell by almost 22%, and consumer price infl ation reached 1069%.

In the early 1990s, the immediate reaction to economic uncertainty was a sharp decline in labour demand. There was a certain delay before the employment effects of the transition crisis were felt, as enterprises were at fi rst reluctant to dismiss redundant workers. Labour demand decreased steadily between 1990 and 2000. The employment rate fell from 76.4% in 1989 to 60.7% by 2000, when it fi nally stabilized. The decline in the rate of employment is especially dramatic in absolute values: as compared to 1991, the number of working people declined by an astonishing 27% by 2003 (or by 218,500 workplaces in a country with 1.4m inhabitants).

While from 1989 to 1991 unemployment practically did not exist, in 1992 it became quite real. However, the fall in GDP did not lead to high unemployment in the fi rst half of the 1990s and unemployment in Estonia increased only gradually (see Figure 1). Some reasons for this moderate unemployment growth that have been put forward are a sharp drop in labour force participation, relatively fl exible labour markets, low unemployment benefi ts and net migration to the former Soviet Union (Eamets, 2001). Estonia has had two recessions, one caused by the general transition shock and economic restructuring after the currency reform (1991–4) and the other by the local fi nancial market crisis followed by an external shock caused by the Russian fi nancial crisis (1998–9). As a result of the fi rst shock, the unemployment rate reached almost 8% and following the second shock, unemployment rose to 15% in early 2000.

Annual job displacement rates increased gradually during the initial transition period from only 1% of employees a year in 1989 to 13% in 1992, before falling to about 6% by 1998 (Lehmann et al., 2005: 63). Redundancies rather than plant closures

Figure 1. Developments in Estonian Labour Market (%)

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account for the majority of displacements. About half of all displaced workers fi nd a new job rapidly, while the other half have diffi culties in moving back to work (Lehmann et al., 2005: 70).

A key feature of Estonia’s economic performance since the start of the transition has been the high foreign direct investment infl ows. At the end of 1999 it had attracted the second largest stock of foreign direct investments per capita in Eastern and Central Europe (after Hungary). This has been largely linked to the fact that Estonia had completed privatization of all manufacturing enterprises (Joint Assessment of Employment Priorities in Estonia, 2001). There were no restrictions placed on foreign ownership of former state enterprises or on new foreign investments. Unfortunately, a lot of enterprises owned by foreign capital use Estonia primarily as a production shop, where products and technologies developed elsewhere are being realized (Borsos-Torstila, 1997). The Estonian economy is predominantly export-oriented, based on the use of cheap labour and the sale of raw materials at a low processing level (Terk, 1999).

Privatization

During its Soviet past, Estonia acted as the economic laboratory of the Soviet Union where several Soviet economic reforms were tested; this continued from the 1950s up to the disintegration of the Soviet Union. The results of these economic reforms seemed at least to have a somewhat positive effect on the economy and entrepreneurship in Soviet Estonia. The ‘guinea pig’ role in these experiments brought Soviet Estonia and its business sector slightly closer to a market economy than other Soviet republics (Liuhto, 1996: 121).

However, the most infl uential factors determining enterprise characteristics and performance have not been legacies of the Soviet past but the different models of privatization of the post-Soviet period (Pissarides et al., 2003: 506). Privatization in Estonia took place in three distinct stages (Terk, 2000). The fi rst stage was connected to Gorbachev’s reforms in the Soviet Union after 1986. Between 1987 and 1990, several hundred small state enterprises and worker cooperatives were established in Estonia (see also Kalmi, 2003). Cooperatives were privately owned from the start. Typically small state enterprises were later privatized to their employees. These spin-off fi rms could legally appropriate various assets from state-owned large enterprises. Managers and workers were favoured with legislation in the early stages of privatization (Nikula, 2004: 128). From 1989 to 1991, about 200 companies were leased by employees and in 1991 some so-called people’s enterprises were transferred to employees free of charge (Jones and Mygind, 1999: 427). The level of required start-up capital was very low, which made it easy to establish a fi rm.

The second stage started in the late 1980s when the establishment of new private companies became legal and the small privatization programme was launched. The early small-scale privatization in 1991 and 1992 favoured employees, but those advantages were removed in 1992.

The third stage, the centralized privatization programme, started with the establishment of the Estonian Privatisation Agency in 1992. After the change in privatization policies, it became very rare for enterprises to be privatized to

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employees (Kalmi, 2003). Most of the large enterprise privatization followed the ‘Treuhand’ approach of individual sales through evaluated bidding. This meant that groups with access to capital, including foreigners, were in a strong position. An important consideration behind choosing this privatization model was the political will of governmental forces to prevent large-scale managerial buy-outs of the enter-prises (Lauristin and Vihalemm, 1997: 107). There were no restrictions placed on foreign ownership of former state enterprises or on new foreign investments. World Bank data show the large share of outside owners among all sales (see Table 1).

Use of the bankruptcy law to transfer assets into private hands also became increasingly common. The success of the privatization model used in Estonia has been explained in terms of factors such as a preference for selling enterprises as a whole rather than in part and an orientation towards selling to owners who intend to become actively involved in developing enterprises (Terk, 2000). Rapid privatization meant that private ownership became dominant relatively quickly in the economy as a whole, which meant that by 1995, 90% of all Estonian enterprises were in private hands. The opportunities for developing non-agricultural enterprises have changed since the introduction of the Business Law in 1995. People no longer have the same chances to set up enterprises based on their own savings as at the beginning of the 1990s.

An alternative privatization method, restitution to the former owner, has mostly had an indirect effect on non-agricultural entrepreneurship in Estonia. The Estonia of the 1930s has been referred to as ‘a semi-colony of big capitalist power’ (Hinkkanen- Lievonen, 1984: 263–5) due to the high levels of foreign ownership. Besides foreign dominance, the Estonian state also played a major role in manufacturing. Domestic

Table 1. Methods of Privatization for Medium-size and Large Enterprises in Transition Countries to the End of 1995

Sale to Outside Owners

Management-employee Buyout

Equal Access Voucher Privatization

Restitution Other State Owned

Estonia By Number By ValueCzech Republic By Number By ValueHungary By Number By ValuePoland By NumberLithuania By Number By Value

6460

32 5

3840

3

<1<1

3012

0 0

7 2

14

5 5

0 3

2250

0 0

6

7060

010

9 2

0 4

0

0 0

2 0

28 3

3312

23

0 0

415

1040

2242

54

2535

Source: World Bank (1995).

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private entrepreneurship was often modest in size and concentrated on agriculture and trade (Liuhto, 1996). The restitution programme provided compensation and returned specifi c assets (in most cases, assets and buildings). Particularly in the latter case, the restored assets sometimes had substantial value to potential entrepreneurs, either for direct use in a new business or as collateral to obtain fi nancing. More than 200,000 claims for restitution of pre-1940 property were submitted by the April 1993 deadline. Of these claims, 80% had been processed by October 1995 (European Bank for Reconstruction and Development [EBRD], 1996: 149). People who had received privatization vouchers as compensation for their nationalized properties or for their years of work were given the opportunity of using these vouchers to buy not only apartments, but also land and shares in privatized state companies. Thus, the compensation awards have helped in the establishment of new businesses.

The following presents an overview of the privatization of agriculture, which had its own special character. Estonia between the two world wars was a predominantly peasant state of independent small farmers (Alanen et al., 2001). The restoration of independence in 1991 was followed by an agricultural reform. The goal of this reform was the dissolution of collective and state farms, and the transfer of their resources to smaller farms.5 Estonia followed the de-collectivization strategy promoted by inter-national organizations. National movements also ‘embraced a nostalgic trend that idealised petty production in agriculture’ (Alanen, 2004: 2), because state and col-lective farms were considered an expression of the occupation force.

Two methods dominated the privatization of collective farms in Estonia. The primary method should have been the restitution of former ownership relations or compensation through vouchers (Tamm, 2001). Although the majority of people wanted to have their old family farm back, only a minority was willing to start farming the restored land. The land was frequently fragmented as it had to be split up among several benefi ciaries. The work-share voucher method was applied to col-lective assets, which included production complexes as well as the majority of the machinery and livestock.6 The collective and state farms typically consisted of several departments and units (some of which were auxiliary to agricultural production). There were 3000 enterprises in 1995, which were the successors of 340 collective and state farms (Organisation for Economic Co-operation and Development [OECD], 1996). Less than 1000 of these enterprises were involved in agriculture.

According to Alanen (2004: 20) the result was the failure of the agricultural reform resulting from problems in synchronizing the processes of restitution and purchasing with vouchers. The specifi c character of privatization (selling to strategic investors) in Estonia means that most enterprises in the secondary and tertiary sectors are de novo fi rms. Spin-offs are concentrated in agriculture.

Data

We combine two different data sets in our analyses: quantitative data from the Estonian Labour Force Surveys (ELFS) and qualitative data from in-depth inter-views conducted in 2003 and 2004. The ELFS 1995 was the fi rst labour force survey conducted by the Statistical Offi ce of Estonia. We use the data of ELFS 1995 to cover

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the 1989–94 period, the ELFS 1997 and 1998 for 1995–8, and the ELFS 1998, 1999, 2000 and 2001 for 1999–2001.7 The ELFS provides a set of detailed retrospective information on job mobility. It covers a time-frame from early transition period to the 2000s and allows analyses from 1989 to the 2000s. The sample size is big enough to analyse transitions to self-employment. As retrospective data of the different waves of the ELFS cover different periods of time, we use an annual format: for every respective year, the status at the beginning of the year as well as all moves that characterize the transitions under study are taken into account.8 We differentiate four periods: 1989–92 as the fi rst stages of privatization; 1993–5 as the period of intensive restructuring and rapid increase of unemployment; 1996–8 as a more stable period; 1998–2001 as the period after the Russian crisis. The number of new enterprises fell slightly in the late 1990s, refl ecting the consequences of the Russian crisis. In 1998 and 1999, the number of liquidated enterprises was almost three times higher than the number of created enterprises. Numerous studies of post-socialist entrepreneurship in Eastern Europe employ data about characteristics of different categories of self-employed before and only three to four years after the collapse of communist regimes. Employing data from the 2000s allows us to assess whether the conclusions of previous studies refl ect a temporary phase in transition or more general trends.

The use of survey methods can identify general trends in macro variables, but may neglect micro processes of decision-making. This requires a turn to more sociological perspectives with qualitative research methods (Perren and Ram, 2004). We have conducted 32 interviews with members of the cohort, who obtained their education under the Soviet system, completing their schooling in the mid- to late-1980s, and fi rst entered the labour market at the start of the major social and economic transformations of Estonian society.9

Young adults who were in their 20s at the beginning of the economic changes (about 1989) and are now in their late 30s are often considered to be the most suc-cessful age cohort under transition. Adjustment to market economy relations and ways of behaviour was easier for young people with no old behaviour patterns. New enterprises were mostly launched and managed by younger people. This gen-eration has been called the generation of winners due to its members’ successful and rapid careers and economic well-being. In 1998, 12% of this cohort were self-employed (7% were entrepreneurs and 5% individually self-employed). The rate of self-employment in this cohort was higher than the rate for the whole working population. Additionally, 5% were self-employed before 1998 but had ended their business since. We should take into consideration that the representatives of this cohort were too young at the beginning of the 1990s – most of them did not have enough time to become managers of big state enterprises.10 As their participation in the privatization of fi rms where they were employed should thus be quite low, we assume that the cohort should represent typical paths of creation of new start-up fi rms in Estonia. It has been mentioned that a lot of research has analysed the process of privatization, but relatively little work has focused on new start-up fi rms in post-socialist countries (Jurajda and Terrell, 2003).

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Self-employment in Estonia

Self-employment is a new phenomenon in Estonia. Some former socialist countries such as Poland and Hungary permitted some limited forms of small and private enterprises in the 1970s and 1980s (Róbert and Bukodi, 2004). In the Soviet Union offi cial proscriptions relegated self-employment to the realm of the underground economy (Gerber, 2004). Only when the ‘Law of Cooperatives’ was implemented in 1988 could Estonians openly take up self-employment. Figure 1 contains data on the change in the proportion of all self-employed workers. The proportion started to increase after 1993 and it was highest in 2000. This fi gure is on the same level as the share of self-employed people in Norway and Denmark (Blanchfl ower, 2000).

Data from Estonian Labour Force Surveys indicate that there seem to be several different groups of self-employed: employers (i.e. self-employed people who employ others as well) and groups of individually self-employed in different sectors – in agriculture, in industry, in personal services. Employers are concentrated in the personal service sector while the activities of a large proportion of the individually self-employed fall into agriculture (see also Saar and Unt, 2006). Most employers have very small enterprises: more than half of them have less than fi ve employees.

Increases in educational attainment are generally found to lead to an increase in the probability of being self-employed. Our analysis indicates that the self-employed are a very disparate group: in 1993 the individually self-employed in agriculture and in industry were less educated (almost a third of the self-employed in these sectors had only basic education), while employers were more educated (a third of them had higher education) than employees. The level of education of the self-employed in personal services is comparable to that of employees (see Table 2). This result confi rms the conclusion of Blanchfl ower (2000). He discovered that the less educated (age left school < 15 years) and the most educated (age left school > 22 years) have the highest probabilities of becoming self-employed. We assume that for less educated people, the ‘unemployment push’ was more important, while for more educated people it was the ‘entrepreneurial pull’. The concentration of less educated self-employed in industry and agriculture may support this assumption since the structural changes in these sectors were the most signifi cant.

The changes in the educational composition of employers from 1993 to 2002 have been minor. The educational structure of other groups, however, has changed substantially. It seems that two categories are moving away from the individually self-employed: persons with basic and higher education. Among the self-employed in agriculture, in industry and in personal services the proportion of people with only a basic education has decreased. Among the self-employed in industry and in personal services the proportion of people with higher education has decreased as well.

The data about transitions into and out of self-employment by years presented in Table 3 indicate that there were significant differences in the educational composition of movers by periods. The fi rst period (1989–93) can be characterized by the quite low educational level of those entering self-employment (a quarter of them had basic education). It was the period when small business operations had low entry barriers in terms of human capital and skills. During the second period the educational level was signifi cantly higher: the proportion of entrants with basic

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Tabl

e 2.

E

duca

tion

al C

ompo

siti

on o

f the

Sel

f-em

ploy

ed (

%)

Indi

vidua

lly S

elf-e

mpl

oyed

in…

Empl

oyee

sEm

ploy

ers

Agric

ultu

reIn

dust

ryPe

rson

al S

ervic

eAl

l Sec

tors

1993

Ba

sic

Se

cond

ary

Sp

ecia

lized

Sec

onda

ry

Hig

her

To

tal

N

umbe

r of

Res

pond

ents

16 39 25 20 100

5,26

0

2 37 27 34 100

114

33 40 19 810

0 48

27 40 13 20 100 …

13 61 13 13 100 23

25 44 16 15 100 92

1997

Ba

sic

Se

cond

ary

Sp

ecia

lized

Sec

onda

ry

Hig

her

To

tal

N

umbe

r of

Res

pond

ents

12 43 25 20 100

2,56

3

3 39 21 37 100 62

21 48 23 810

0 53

27 33 20 20 100 …

11 67 11 11 100 28

18 50 18 14 100

102

2002

Ba

sic

Se

cond

ary

Sp

ecia

lized

Sec

onda

ry

Hig

her

To

tal

N

umbe

r of

Res

pond

ents

11 46 24 19 100

7,49

8

1 40 25 34 100

214

19 39 33 910

025

2

7 67 18 810

0 79

3 70 20 710

0 61

12 56 9 23 100

475

Sour

ce: O

wn

calc

ulat

ions

bas

ed o

n Es

toni

an L

abor

For

ce S

urve

ys 1

995,

199

7, 2

002.

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education decreased and the percent of entrants with higher education increased. During the next two periods there was a certain decrease in the proportion of both extreme educational groups (entrants with basic education and entrants with higher education). A comparison of exits from self-employment by years indicates that for all periods the educational composition of quitters was similar to the composition of all self-employed. However the proportion of individuals with higher education exiting self-employment increased from 1993 to 2001 substantially.

Case Studies11

Early Birds, StayersThis group includes individuals who entered self-employment in the early 1990s and have stayed there. Representatives of this group were employees working in the primary and secondary sectors in the early 1990s. People working in the privatized branches of the economy were much more directly affected by the turbulences of economic reforms. Most companies were restructured after privatization and massive lay-offs were everyday events. People faced the increasing insecurity of workplaces and experienced unemployment for the fi rst time. As one interviewee, who was working at a collective farm, describes:

... then the farms started to break apart and rental companies were formed. I spent several years in that rental company. Then the land returns started and things fell apart. Everyone wanted their own share and then I started business on my own. Created my own transportation company. (Owner of a small transportation company, September 2003)

On being asked whether he still considered entering private entrepreneurship a good decision, he said there was ‘nothing else to do anyway’. The following respondent (car electrician) had also entered private entrepreneurship in the beginning of 1990s. His life path illustrates the lost institutional embrace of the socialist economic system quite clearly.

Table 3. Educational Composition of Entrants into Self-employment and Quitters from Self-employment by Period (%)

Entry into Self-employment Exit from Self-employment

1989–92 1993–5 1995–71997–8

1998–91999–20002000–1

1993–5 1995–71997–8

1998–91999–20002000–1

BasicSecondarySpecialized SecondaryHigherTotal

244417

15100

143825

23100

85319

20100

116210

17100

184323

16100

55126

18100

85710

25100

Source: Own calculations based on Estonian Labor Force Surveys 1995, 1997, 1998, 1999, 2000, 2001.

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When the period of changes began, I worked in a public company in my own specialty, a specialty close to mine, but in connection with the arrival of the new era, state companies started to disappear one by one and I had to start thinking about my own path myself, about creating something, and thus that company got founded. That was it ... the beginn-ing was quite diffi cult ... the situation was such that one really had to start making one’s own decisions, for oneself, and one’s own future and all that. (Car electrician, June 2003)

However, the motivation behind starting a private business was not purely taking advantage of newly emerging possibilities. It was quite clearly also a forced move since previous workplaces disappeared as a result of the collapse of collective farms or the closing of industrial enterprises. Especially in rural areas, where regular jobs were scarce, self-employment was almost the last resort when grasping for survival.

At the same time, new possibilities to start private businesses emerged. Private entrepreneurship has been seen as a mobility opportunity for all people who are able to take risk, irrespective of their educational background. One interviewee described the privatization process of collective farms. Some of his friends, who were specialists and managers in collective farms, succeeded in privatizing thousands of hectares of land (in his words, they ‘put their hands on the kolkhoz’). They live well. They managed to seize just the right moment to use the available resources in the countryside. According to Hellman (1998), in the beginning of reforms there were suffi cient market distortions to produce opportunities for very large profi ts. It has been mentioned that due to their previous linkages with the former state-owned company, spin-offs tend to benefi t more than new start-ups due to the fact that they inherit capital equipment (Pissarides et al., 2003). They also enjoy useful connections with other companies, which make their existence easier.

Most employees were not so lucky: their ‘labour shares’ were smaller and they gained smaller pieces. For example, one of the interviewees acquired an apiary and was now running a bee farm. Responding to being asked if his life had gotten worse with the changes, he commented:

No, it didn’t get worse but well, I just got more issues myself, that there was nothing around then, so I just took the honey and the beeswax away and got the pollen marketed and that was it. But then I had to sort of start marketing the pollen myself, then the speculators turned up, then the speculators sort of started to get in debt and I didn’t get all the moneys and … well, up to now everything’s still sort of worked out. (Bee-keeper, August 2003)

He admits that there are problems with the legal marketing of honey products. He is selling honey to private people. As he said, he is doing this underground. The bee-keeper deals additionally with three side activities in order to cope with the quite low income that his fi rm provides.12

The typical enterprise founder belonging to this group had technical or agricul-tural vocational or secondary specialized education. If talking formally, then the individuals belonging to this group had benefi ted from the new economic situation and had been upwardly mobile because they established their fi rms without having higher education. Still, taking a closer look, they were successful at the beginning of

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their private businesses, when there was only limited competition. The businesses gave them a very good economic return in the early days but most of them did not manage to face up to expanding competition. They were heavily dependent upon just some major clients, which made them vulnerable to changes in the job demands of these clients. In beginning of 2000s, in the context of tightening competition and more and more regulated legal environment, the respondents continuing their business were very pessimistic about the future of their fi rms. One interviewee owning a small enterprise that was involved in installing safety equipment for cars was thinking that:

small businesses as they are now will be done away with. This is the most worrisome moment now – that it’s not possible to run a small business at such a level anymore, even though it’s actually what feeds many families and is the main source of income. I foresee very big changes there in Estonia: there are diffi cult times ahead especially for small businesses. This is what doesn’t leave my mind in peace in the day or night. (Car electrician, June 2003)

Another interviewee believed that self-employment did not have a future in other countries either and that globalization would have a major impact on business: big strong fi rms would swallow the small ones. Most interviewees were afraid of EU requirements. They complained that they could not get a usage permit for service space any more because the rules had become too strict. There was a danger that all small shops and cafés would be closed. They had hopes that perhaps the conditions:

… won’t be made so severe, that a blind eye will be turned to some things, that the people who are used to earning their upkeep by running their own business could keep doing it to an extent. (Car electrician, June 2003)

One interviewee had a suspicion that

… those Euro requirements, that our people have translated, are done wrong, are simply overdone. Nowhere in other Euro countries are the regulations so strict as here. But well, that’s in an Estonian’s nature. (Bee-keeper, December 2003)

In addition to very insecure work contracts, most of the self-employed belonging to this group acknowledged that they hardly got any days off. They were also working during public holidays and during weekends. In general, they found that looking back at their career during the last decade, they were having the hardest time of their careers as private entrepreneurs. One interviewee owning a transport fi rm also repaired his trucks by himself. Although he was a private entrepreneur, he still had very poor work conditions, long working hours and limited material reward for his work. Although according to occupational classifi cation he was classifi ed as a manager, he identifi ed himself as a lorry driver.

It would seem that there are no differences between employers and the individu-ally self-employed. Even though practically all representatives of this group have some employees, their work conditions are often described as very poor. Long working hours, insecurity and semi-illegal fi nancial relations with partners or clients are some key phrases to mention.

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Early Birds, QuittersThis group includes employees working as specialists or managers in the different sectors.13 They entered private business also in the early 1990s but later quitted and started to work as dependent workers. They have higher education. Due to their studies at university, they entered the labour market shortly before the collapse of Soviet rule. It was in some sense an advantage because an important characteristic of this group was that they were not as rooted in the old kind of work culture. But they were disadvantaged as well because they had not had enough time to achieve an advantageous position in state fi rms to get signifi cant pieces of the fi rms as they were privatized.

One illustrative case of how structural changes had pushed a person to move to self-employment is the biography of a man with higher education, who was currently working as a project manager in a foreign construction fi rm. He had tried hard to fi nd a stable position during the changes, but he was just not lucky. The following passage from the interview describes in a vivid fashion how profoundly the labour market was restructuring and what was the magnitude of the instability people faced in privatized sectors.

I had an assignment and a job and everything already. Exactly a month before I graduated, that company ceased to exist, just like all of amelioration. In the 1990s actually the whole state-supported, as it had always been, amelioration ceased to exist in Estonia … Most of us (course mates) went into construction, since we got as much construction at school as amelioration itself. I worked in this fi rm 2 years exactly, then this company ceased to exist, as it was also a kolkhoz construction offi ce but kolkhozes ceased to exist as well, there were no fi nances, but all construction departments became small limited liability companies at that time. Practically the same group of people was just a limited liability company now. The fi rm spawned some 10–20 companies like that, each department made their own Ltd. Company. Then there was the chance to work two more years in that small company, then the Estonian kroon came and all construction activity in Estonia stopped for a while completely … Then the company where I worked … some information was obtained from somewhere and well, we formed connections with that factory in Germany for importing leisure goods: garden furniture, bicycles, lawn-mowers … something like that. We continued the trading with Germany. Until … almost last year (2002). (Manager in private building company, July 2003)

He used his knowledge and contacts with a German factory gained from his previous workplace to start his own private business. He did not invent anything new compared to his old workplace; he just continued trading with Germany in his own limited liability company. Representatives of this group were very willing to discover the world on the other side of the iron curtain, whether by travelling or by taking jobs in western countries. One interviewer said that during his apprenticeship in Germany he understood that agriculture was to be marginalized in Estonia too and that he had to fi nd another job. However, they did not start their businesses from scratch, but tried to make use of their previous contacts.

One engineer married a woman who had set up a curtain shop, which introduced him into private business. He considered his work experience in Germany and marrying a businesswoman two of the most decisive steps for his life path. Both had graduated as engineers, but were active in trade because this is where the

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opportunities were in the early 1990s. However, by the end of the 1990s the economic situation had changed and small shops were becoming marginalized in the context of more intense competition. Both engineers then decided to leave the shrinking fi eld of private business and to continue their careers as employees. Having a degree in engineering played a very crucial role in taking this step. They were successful in taking advantage of their educational credentials and private business experience and found work as managers of big state or foreign owned companies. What were their motivations for abandoning their private businesses and starting to work as employees? They both admit that it had to do with the change in the general economic situation that made it diffi cult for their businesses to be profi table any more. They pointed to widening competition, tightening regulations and a shortage of investments as the main reasons to close down their business. When asked why he had decided to close down his own business one respondent replied:

Because everything in Estonia changed so much. In order to do something one has to have a lot of money – free money to start with. That cannot really be helped – you have to keep investing all the time. But we spent everything we earned. So basically there were many reasons – Estonian laws kept changing and so, just to keep running your own business the same way, one has to change a lot. Free money has to come from somewhere, either a bank loan or just anything ... (Manager in private building company, July 2003)

A manager who had started to work for an Estonian Railway company explained his decision as a new challenge:

… to go from my own 10 people private company to a company with 360 employees just in one day basically, where I before had a million as the yearly turnover then there the turnover was 60 millions a year, you know, the temptation was great, to challenge myself, working with other people. (Manager in Railway company, September 2003)

They made the move to more secure employment during the cooling down period of the Estonian economy. It was a time in which many businesses, especially small ones and those bound to Russian markets, either closed down or vegetated. Compared to the previous group, they had secure work and a substantial income without taking any entrepreneurial risks. However, they emphasized the importance of their experiences in self-employment and thought that they had advantages compared to colleagues without such experiences. As one interviewee said, he now knows what it means to be responsible for the success of the fi rm, to be economical.

Thus, it seems that the more educated people who also had an appropriate social network were not only more often successful with their private entrepreneurship, but also had more possibilities to leave self-employment for another status if business did not prove to be benefi cial anymore. The more educated individuals were better able to orient themselves in new, challenging situations and succeed where others would not. They appeared better able to overcome different constraints (Pissarides et al., 2003).

Later EntrantsThe individuals belonging to this group entered self-employment later, at the end of 1990s or even at the beginning of 2000s. Most of them became self-employed

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mainly through personal preferences. According to the typology developed by Stanworth and Stanworth (1997) they belong to the category of ‘missionaries’. Simil-arly to the previous type, they had previously worked as managers or professionals and had higher education. However, instead of being engaged in trade or something else loosely connected with their prior education and work career, they had estab-lished their companies in the areas where they could make the best use of their previous experience and established contacts. A woman who worked as a trans-lator admitted openly that without previous knowledge and contacts gained at a law offi ce, it would be impossible for her to run her business:

But actually it [working at the law offi ce] was again something that really helped me evolve a lot. Because I think that without that stage, I couldn’t really make it as a freelancer now. In my work I use the bases that I actually learned during working at the law offi ce, because I now mostly do legal translations. Everything has sort of taken me to some next activity. (Freelance translator, September 2003)

Another entrepreneur, who had founded a small bus company, worked pre-viously as a school director and in several management positions in the local municipality. He had made extensive use of previously accumulated social capital while building up his fi rm. A stable contract with the local school where he worked as director helped him to survive during the winter low season. In the spring, school trips were organized through his company. He did not see himself as taking ad-vantage of emerged entrepreneurship; for him it was a logical step that he made almost 10 years after economic reforms.

Both members of this group mentioned freedom as the most important advantage of self-employment. The translator explains:

Of course it has both its good and bad sides, but it’s mostly being my own master … It enables me to plan my time, to have control over my work and activities. (Freelance translator, September 2003)

The owner of the bus company thought that his work now was in some ways more intense but in other ways also more peaceful as it did not involve regulated hours.

Both the bus company owner and the translator looked to the future with enthu-siasm. While they were not completely confi dent of the future, they had no plans to end their private business activities at the moment. In contrast to people who had opted for self-employment as a means of escape from unemployment, they felt that their work was secure and enjoyable. Their outlook for the future was full of optimism. For instance, the owner of the small bus company planned to expand his company and buy two extra buses. These examples correspond to the fi ndings of some other studies that have also found that those with higher education are more likely to expand their businesses (Aidis and Mickiewicz, 2004).

ShuttlesIndividuals belonging to this group had moved between employment, unemploy-ment and self-employment. Self-employment was for them a temporary strategy to take refuge from unemployment, to make ends meet. They took advantage of the rather favourable situation in the early 1990s for establishing one’s own business.

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The entry barriers in terms of human and fi nancial capital were low. Most of them had secondary or secondary specialized education, except for non-Estonians, many of whom had higher education.

The work career of one particular man is especially characteristic of shuttles. He had moved to private business in the end of the 1980s. A friend set up a bar and he decided to become a barman. It was a very diffi cult time; there was a shortage of products and hard liquor. The competition was tough and the bar went bankrupt. After this, he worked as a plumber for three years, but with the reorganization of the state enterprise, he, as most workers, lost his job and became unemployed. This was when he set up a business together with an acquaintance. There were no offi cial borders at the time and they imported school supplies from Belarus. However, the business did not last long. In 1996, he began working in an oil shale mine.

One group of people founding a fi rm out of reasons of necessity were women returning from maternity leave, having lost their jobs. They perceived self-employment as the only viable route into the workforce (see also Arenius and Kovalainen, 2006). Self-employment refl ected their inability to fi nd a new satisfactory regular job. One woman described her business as follows:

Then [after failed attempts to fi nd a job as an employee] I started my own company. I transported bread – I was made such a proposal and then I started to transport bread. Got the breads from the manufacturer and took them to stores, sold them on … And then I had my own car. Kept the tabs myself, did the accounting myself. That’s all. Driver, accountant, dispatcher – everything, all in one. Divided it all myself, ruled it all myself. It didn’t pay off, as I didn’t manage to expand. I didn’t have enough capital to expand the business. (Manager of private shop, February 2004)

The self-employed in personal services did not have very good chances of status and continuing employment; this sector turned out to be very dynamic; job mobility seemed very high. A lot of small shops and bars had opened in the 1990s. But most of them had closed after some years due to the competition being very high, only bigger shops survived. One non-Estonian woman describes her motivations and results in running a shop:

Well, then I tried to fi nd something to do. I decided to start my own business. I was involved in that for three years but I didn’t have enough knowledge or fi nances. My attempts ended unsuccessfully. (Part time employee in a shop, March 2004)

In most cases, their businesses did not last long. The fi rms were facing fi nancial problems that hindered expansion. They were also lacking in management knowledge. In addition, getting land, offi ce space and buildings was a signifi cant problem. They also admitted having problems with legal marketing of their products. Because of the underdeveloped formal institutional support they had to depend heavily on informal networks, such us family and friendship ties. Most entrepreneurs were forced to hold side jobs in order to cope with low income. Rural entrepreneurs in the service sector were dependent on local demand and there was practically no market for their services due to widespread poverty in villages. Firms established by non-Estonians mostly had links to Russian enterprises. The Russian crisis in 1998 was diffi cult for them and some of these fi rms did not survive it.

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Conclusions

Based on the analysis of the surveys and the qualitative data we conclude that the crucial mechanism explaining the different experiences of self-employment has been the process of selective mobility into self-employment. It means that the approach proposed by Wu and Xie (2003) for analysis transitions into the market sector in China is applicable for studying transitions into and out of self-employment as well. At the beginning of the 1990s, less educated workers who were working in the primary and secondary sectors started new businesses. During the reforms, workplaces in these sectors often worked as a ‘push’ factor for the establishment of private businesses since massive lay-offs and restructuring in the economy did not leave workers any other possibilities. Mostly, this was a forced movement as old workplaces often disappeared with the fall of the old system. Although a move to private entrepreneurship is often seen as an upward path, it is not quite as clear-cut when one takes a closer look. Private entrepreneurship has often been forced: people have opted for it because they just did not have any other alternatives. Their work conditions are often described as very poor. They have little autonomy in the workplace. This kind of entrepreneurship may be characterized as ‘survival trading’. For individuals this type of self-employment holds little promise of cumulative growth. According to the typology of segmented labour markets they are part of a secondary external labour market and belong to the less advantaged group (Stanworth and Stanworth, 1997).

The proportion of individuals with higher education exiting self-employment increased from 1993 to 2001. The majority of the better educated self-employed who started their businesses (especially in industry or in personal services) during the fi rst half of the 1990s leapfrogged through self-employment into good jobs (managers) in state and private companies. They understood that they lacked the necessary fi nances to develop their businesses. However, as a consequence of various reforms in recent years, the type of people moving into self-employment is changing. Self-employment is becoming more attractive to better educated people belonging to the group of professionals but it is inconceivable that they will eventually begin to compete with larger fi rms. Social capital related to the dense network helped them to establish their business. Their business may be referred as ‘life-style’ business (see also Walker and Brown, 2004). They have no intention of growing their business into larger entities. It is possible that early birds may be wiped out by the infl ow of more educated people into self-employment.

Our analysis indicates that separating the self-employed according to two distinct class locations – the individually self-employed and entrepreneurs – proposed by Hanley (2000) seems to be an oversimplifi cation. Often there are no differences between the individually self-employed and entrepreneurs with a few employees. The individually self-employed as well as small entrepreneurs own little in the way of business assets, meaning that their incomes derive for the most part from the expenditure of their own labour power. More important are the differences between, on the one hand, the self-employed establishing their fi rms in response to a per-ceived opportunity (these people tended to be better educated and were working in business or social services), and on the other hand, the self-employed who did so

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for reasons of necessity (mostly the less educated working in primary and second-ary sectors as well as in personal services). In addition, there is variation between the self-employed in different sectors as well as the self-employed in professional and non-professional occupation (see also Arum, 2007). Our results confi rm con-clusion made by Stoica (2004) that different types of entrepreneurship rely on particular resources or forms of capital. Entrepreneurship as an internally stratifi ed phenomenon consists of qualitatively distinct strategies. Our analysis also shows that self-employment now occurs primarily in professional activities and unskilled marginal pursuits as Arum (1997) and Arum and Müller (2004) have concluded.

The types of resources that have been recognized as capital in entrepreneurship were a function of differences in institutional conditions and specifi c exit trajectory from communist past followed by each country. For example, Hanley (2000) shows that, as compared to Polish managers, Hungarian managers have been more successful in acquiring assets of state enterprises because the government allowed managers to initiate privatization. There seems to be a clear connection between the way the privatization of large enterprises has been carried out and the health and character of self-employment. The Estonian strategy of market transition has been aimed primarily at changing property relations in the corpor-ate sector, rather than encouraging small businesses to grow bigger. The very rapid nature of the privatization process has tended to favour insiders in big enterprises (mostly managers) as well as foreign investors, and has not been favourable for the development of small businesses. Until recently direct support measures for the development of SMEs in Estonia have been noticeable by their absence, with the role of government best characterized as one of limited intervention. The enterprise policy was infl uenced by the wish to enable rather than intervene in economic activity. According to Greene (2002) this was characteristic also for enterprise support policy in the UK in the 1970s. The current institutional arrangements are insuffi cient for facilitating self-employment in post-socialist Estonia and the lobbying power of small entrepreneurs and self-employed people is too weak to press for change.

The main political conclusion based on our fi ndings is that the small enterprise sector is not by itself capable of creating successful economic growth. Much self-employment is essentially only about subsistence, making it highly unlikely to provide the requisite foundations for growth. Policies directed at moving the unemployed into self-employment are mainly temporary solutions because a lot of very small-scale business activity is a dead end due to lack of resources.

Notes1. Young adults who were in their 20s at the beginning of the economic changes (around 1989)

are often considered to be the most successful age cohort under transition conditions in Estonia. As Tallo and Terk (1998: 14) emphasize, adjustment to market economic relations and ways of behaviour was easier for them because they had no old behaviour patterns. This generation is often described as the ‘winners’ cohort or ‘winners’ generation.

2. Entrepreneurship in the Weberian sense is defi ned in terms of the capitalist’s commit-ment to sustained accumulation such that personal consumption is sacrifi ced. With proprietorship the ownership of assets is used for personal consumption (Scase, 2003).

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3. Wu and Xie (2003) called this type market losers. 4. They separated four main types of book publishing self-employed freelancers: refugees

(they became freelance because of the loss of employment), trade-offs (they became freelance through a desire to accommodate certain non-work needs), missionaries (they became freelance mainly through personal preference), converts (they became freelance as ‘refugees’ or ‘trade-offs’ but became committed to self-employment).

5. According to Alanen et al. (2001) the most successful family farms were established on the basis of the Farm Law of 1989, before the dissolution of state and collective farms was decreed, and not as a result of the restitution model. Most of these farms benefi ted from the support of the state during the last years of the Soviet period. These support measures were entirely abandoned when the fi rst farms under restitution laws were set up.

6. The vouchers were handed out to collective and state farm members and employees on the basis of time served in the farm or on the basis of wages paid (some farms used a combination of these two methods). People were offered an opportunity to realize their work shares by purchasing collective assets at book value (Alanen, 2001: 137).

7. In 1995, 9608 individuals (aged 15 to 74) were interviewed, but there has been consider-able fl uctuation in sample size since (1997: 5051; 1998: 13,090; 1999; 12,073; 2000: 7500; 2001: 16,309).

8. The question in the questionnaires was formulated in the following way:

To which of the following groups do you belong?

1. Employee2. Employer3. Farmer with paid employees4. Sole proprietor5. Farmer with no paid employees6. Freelancer7. Unpaid family worker8. Member of a cooperative9. Other [record]

9. The sample of respondents was drawn from the longitudinal study ‘Life Paths of a Generation’ (PG), which was initiated in 1983 by a research group from Tartu University and the Institute of History of the Estonian Academy of Sciences, under the leadership of Professor Mikk Titma, and which interviewed graduates from secondary educational institutions of that year (see for example Titma et al., 1998; Helemäe et al., 2000). Although the principle of compulsory secondary education was implemented in the 1980s, by estimations based on census data only 75–85% of the corresponding birth cohort graduated from institutions of secondary education as full-time students in the mid-1980s (Saar, 1997). Thus, selected on an educational basis, the PG cohort is an advanced part of the corresponding birth cohort. For interviews, three to four respond-ents from graduates of each type of secondary education, were chosen. Eight types of the institutions of secondary education were distinguished: rural vocational schools; urban vocational schools; agricultural specialized secondary schools; industrial specialized secondary schools; other types of specialized secondary schools; common grades of general secondary schools; academic grades of general secondary schools (from 8th grade on); academic grades of general secondary schools (from 1st grade on). We intended to interview people with different ethnicities, places of residence, genders, etc.

10. As we mentioned above, after the change in privatization policies in 1992 in Estonia, it became very rare for enterprises to be privatized to employees.

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11. From 32 conducted interviews, 12 respondents were or had been self-employed. The fi rst type (early birds, stayers) includes three interviews, the second type (early birds, quitters) two interviews, the third type (later entrants) two interviews and the fourth type (shuttles) fi ve interviews.

12. The bee-keeper was not a typical part-time entrepreneur (individual who, besides his/her main job, legally runs private business, see Stoica, 2004: 251) because all his jobs were connected with legal/illegal private business.

13. All public sector specialists and managers in our sample had considered the possibility of moving to the private sector or even of starting ‘their own fi rm’. However, most of them did not realize their ambitions: they explained their decision to stay less in terms of their attachment to their existing jobs, and more by reference to their own laziness or the security of public sector employment. A judge who had contemplated becoming a lawyer, said that ‘I didn’t dare to take a risk and really start my own business’ (Judge in court, September 2003). Also the Eurobarometer 2004 survey indicates that the main reason given by Estonians to explain their preference for employee status is job stability (European Commission, 2004: 10). Specialists and managers from other than the public sector were much more willing to try out the promises offered by private entrepreneurship.

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ELLU SAAR is a senior researcher and professor at Institute for International and Social Studies, Tallinn University, Estonia. She is now coordinating the EU 6th framework project, ‘Towards a Lifelong Learning Society in Europe: The Contribution of the Education System’. She has published articles about social stratifi cation, job mobility, transitions in youth, and self-employment in European Sociological Review, European Societies, Europe-Asia Studies, Nationalities Papers, International Sociology, among other journals. Please address correspondence to: Institute of International and Social Studies, Tallinn University, Uus-Sadama 5-657, Tallinn, 10120, Estonia. [email: saar@iiss.ee]

MARGE UNT is a researcher at the Institute for International and Social Studies at Tallinn University, Estonia. Her research interests lie in social stratifi cation, transitions in youth, methods of data analysis, labour markets, occupations and careers in comparative perspective. She has published articles about transition from school-to-work and job mobility in European Societies, Europe-Asia Studies, International Sociology, among other journals. Please address correspondence to: Institute of International and Social Studies, Tallinn University, Uus-Sadama 5-662, Tallinn, 10120, Estonia. [email: marge@iiss.ee]

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Mobilité sélective dans le travail indépendant au cours de la transition postsocialiste

Lève-tôt, retardataires, tire-au-fl anc et bosseurs

Ellu Saar et Marge UntUniversité de Tallinn, Estonie

Un travailleur indépendant peut très bien être le propriétaire d’une entreprise prospère, sachant tirer parti des créneaux disponibles, tout comme il peut être un réfugié issu d’un statut de pauvreté et du chômage disposant de peu de ressources et n’ayant pratiquement aucune possibilité d’accéder à des revenus élevés. Dans cet article - où nous abordons la question de l’importance que revêtent les facteurs ‘pull’ (incitation) et ‘push’ (attraction) dans le domaine du travail indépendant, basé sur l’expérience de l’Estonie postsocialiste – nous nous appuyons sur des informations émanant de sources diverses (tant quantitatives que qualitatives). Nous arrivons à la conclusion que le mécanisme crucial ici en jeu a pu être la mobilité sélective dans le travail indépendant. L’on a constaté qu’au début des années 90 les travailleurs moins spécialisés des secteurs primaire et secondaire se lançaient dans le travail indépendant n’ayant pas d’autre choix que d’adopter cette solution. Par ailleurs, la plupart des travailleurs autonomes davantage qualifi és, qui avaient fondé leur propre entreprise dans la première moitié des années 90, sont passés du statut de travailleurs indépendants à celui de directeurs d’entreprises appartenant à l’état ou à d’autres organismes. Au fur et à mesure de l’évolution des réformes, l’on a remarqué que le type de personnes qui se lançaient dans le travail indépendant était différent. Mots clés: Pays postsocialistes – Privatisation – Mobilité sélective – Travail indépendant-

Movilidad selectiva al autoempleo en la transición postsocialista

Madrugadores, rezagados, rajados y trajinantes

Ellu Saar y Marge UntUniversidad de Tallinn, Estonia

Por un lado, un trabajador por cuenta propia puede ser propietario de un negocio próspero aprovechando las nuevas oportunidades. Por otro lado, los trabajadores independientes pueden ser refugiados de la pobreza y desempleo con escasos recursos y pocas posibilidades de ganar altos ingresos. En este artículo, abordamos la cuestión de la importancia de los factores ‘push-pull’ en el autoempleo inspirándonos en la experiencia de la Estonia postsocialista. El articulo se basa en datos de varias fuentes, tanto cuantitativas como cualitativas. Llegamos a la conclusión de que el mecanismo crucial en juego ha sido la movilidad selectiva al autoempleo. A principios de los años 90, los trabajadores no especializados de los sectores primario y secundario pasaron al autoempleo por no tener otra alternativa. La mayoría de los trabajadores por cuenta propia mejor cualifi cados que empezaron sus negocios en el primer semestre de los años 90 pasaron del autoempleo a ser directores de empresas estatales o de otros organismos. A medida que avanzan las reformas va cambiando el tipo de gente que pasa al autoempleo. Palabras clave: Países postsocialistas; privatización; movilidad selectiva; autoempleo.

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Selektive Mobilität in die Selbstständigkeit im nachsozialistischen Wandel

Früheinsteiger, Späteinsteiger, Aussteiger und Unentschlossene

Ellu Saar und Marge UntTallinn Universität, Estland

Auf der einen Seite kann ein Selbstständiger ein erfolgreicher Unternehmer sein, der neue Möglichkeiten wahrnimmt. Auf der anderen Seite können Selbstständige aber auch Personen sein, die auf der Flucht vor Armut und Arbeitslosigkeit sind, und über wenige Ressourcen sowie wenig Chancen auf ein hohes Einkommen verfügen. In diesem Artikel befassen wir uns mit der Frage, wie wichtig die Pull- und Push-Faktoren in die Selbstständigkeit sind, in dem wir uns auf die Erfahrungen aus dem nachsozialistischen Estland stützen. Der Artikel nutzt Daten aus verschiedenen Quellen (quantitative sowie qualitative). Wir schlussfolgern, dass der ausschlaggebende Mechanismus die selektive Mobilität in die Selbstständigkeit gewesen ist. Am Anfang der 1990er Jahre haben sich weniger gut gebildete Arbeiter aus den primären und sekundären Wirtschaftssektoren mehr oder weniger deshalb selbstständig gemacht, weil sie keine andere Wahl hatten. Die meisten der besser gebildeten Selbstständigen, die ihre Unternehmen in der ersten Hälfte der 90er Jahre gegründet hatten, haben die Selbstständigkeit wieder verlassen und wurden Manager in staatlichen Unternehmen oder arbeiteten für andere Arbeitgeber. Während die Reformen voranschritten, änderte sich auch der Typ von Mensch, der sich selbstständig machte. Schlüsselwörter: Ehemalige sozialistische Länder; Privatisierung; selektive Mobilität; Selbstständigkeit

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