Income from Self-employment: Development of an Innovative Life Course Model

Lead Research Organisation: Manchester Metropolitan University
Department Name: Business and Management

Abstract

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Description In our first empirical study, we identified a primary, class-based pathway to entrepreneurship, emergent from the inter-generational transmission of resources from family of origin. Following birth to higher class parents, the privileged accrue resources necessary to start a business through higher class (although not highly credentialised), remunerative and satisfying careers. Business founding is an outcome of class privilege. When privileged entrepreneurs failed in education or have domestic responsibilities, start-up may be a defence against downward social mobility. The lower social classes avoid entrepreneurship except as a necessity when household income is low or when childcare responsibilities are low so time can compensate for other resources.

In our second empirical study, we suggested that the relationship between class structured resource accrual across the life course and entrepreneur earnings is complex. Childhood class, occupational status, employment earnings, savings made prior to start-up and investment income and savings made during the business life course are related to higher entrepreneur earnings. We argued that these resources are accrued due to inter-generational transmission processes and, so, are part of a class process. Education, even at a basic level, is unrelated to entrepreneur earnings, however, and occupational privilege does not consistently create higher earnings. We propose three explanations for our findings and outline research directions to identify specific class-based routes to entrepreneurship, including pathways that represent upward and downward social mobility and defence against downward mobility.

Our proposition that household strategies affect entrepreneur earnings is supported unequivocally; domestic and childcare responsibilities inhibit earnings and being free and motivated to work long hours and act as a sole breadwinner increases earnings. These effects are largely sustained across the business life course; businesses are not only time greedy at start-up. We identify a long-term (or 'scarring') effect of heavy domestic work responsibilities at start-up. As domestic work and childcare are gender divided, we propose that gendered household strategies are a primary explanation of the powerful sex difference in entrepreneur earnings.

Our empirical work is supported by a conceptual paper that considers how resource accrual is affected by processes of class and gender across the life course.

We have summarised our key findings, implications for different stakeholders and teaching notes in a brief and accessible Research Summary. Debate about our findings has been fostered via various presentations and our research blog.



A further important outcome of our research has been to raised capacity and capability in modelling life course pathways to entrepreneurship. We have archived a merged dataset from a series of data files prepared at the individual and household level from waves 1 to 18 of the BHPS (1991 to 2008) using SPSS syntax. Through this and the research outputs produced from this project we raised awareness of the potential of the BHPS as a dataset and presented methods for modelling this longitudinal data to the entrepreneurship research and support communities.
Exploitation Route We have targeted non-academics including policy makers, Government Ministers, international and national civil servants and local Councillors and economic development staff); international and national small business support agencies and professionals; suppliers to small firms such as banks and accountancy bodies; nascent and current entrepreneurs, and; teaching staff. We hope that, as our Research Summary is used as a teaching material, our research will also directly impact on undergraduate and postgraduate students internationally. 1. Creation and dissemination of new empirical knowledge about how business start-up and entrepreneur earnings emerge from life course processes.

2. Significantly raising research capacity in: longitudinal modelling; employment of the British Household Panel Survey (BHPS), and; life course analysis.

3. Archiving of a new, longitudinal dataset.

4. Our research challenges widely held assumptions about entrepreneurship as a route of social mobility. This has significant potential to inform enterprise policy and social policy more broadly.

5. Research findings are useful for people thinking about starting or actively running small enterprises.

6. The Research Summary also includes some teaching materials, which will benefit academics in delivering and designing entrepreneurship and small firm related teaching at undergraduates and postgraduates levels.
Sectors Security and Diplomacy,Other

URL http://www.mmucfe.co.uk/services/providing/whomakesmoney/
 
Description Advice to government ministers on business start-up programme planning
Geographic Reach National 
Policy Influence Type Citation in other policy documents
Impact Dr Julia Rouse was invitied by Mark Prisk, Minister for Business and Enterprise, to attend a roudtable discussion to plan a new policy to support business start-up among the unemployed. She attended Whitehall on 27 July 2010 and cited evidence from this study to steer the conversation towards interventions more likely to produce a reasonable wage for disadvantaged entrepreneurs. Mark Prisk and Ian Duncan Smith (Secretary of State for Welfare and Pensions) led the roundtable.
 
Description Leadership of a seminar in Whitehall on the childcare barrier to enterprise
Geographic Reach National 
Policy Influence Type Gave evidence to a government review
Impact In November 2010, the Co-Investigator led a seminar for the Department for Business, Innovation and Skills in Whitehall on the childcare barrier to enterprise. This was attended by civil servants from multiple government departments including the Department for Health, Department for Work and Pensions and Government Equalities Office. It included presentation of the early findings from this research and discussion of implications for enterprise and childcare policies.
 
Description Presentation of policy options to Manchester city councillors
Geographic Reach National 
Policy Influence Type Citation in other policy documents
Impact On 1 December 2011, Dr Julia Rouse gave a formal presentation on evidence of what works in promoting enterprise in deprived communities to a policy committe of Manchester City Council. This drew heavily on the findings from this ESRC sponsored study. Dr Rouse also presented policy options arising from the evidence that helped Councillors to make their ultimate policy decisions.
 
Description Prof. Julia Rouse is acting as an Advisor to Micro-Enterprise Portal Advisory Group (an Office of National Statistics/academic partnership
Geographic Reach National 
Policy Influence Type Membership of a guideline committee
 
Description Researchers take new roles in MMU's Centre for Enterprise 
Organisation Manchester Metropolitan University
Department Centre for Enterprise
Country United Kingdom 
Sector Academic/University 
PI Contribution The Principal Investigator and Co-Investigator were researchers in Manchester Metropolitan University's 'Centre for Enterprise' when this project was secured. They have both moved roles and/or institutions as this project has enabled their career development, However, both have also been granted new honorary roles in the Centre for Enterprise in recognition of the excellence of their work. This has enabled use of the Centre for Enterprise's networks in impact work, technical support in terms of hosting the project website and blog and access to administrative support.
Start Year 2010
 
Description 'How Entrepreneurship Opportunities Emerge From Socially Structured Life Courses', invited presentation at Centre for Research in Ethnic Minority Enterprise (CRÈME), University of Birmingham. 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact round table discussion to set a future research agenda around entrepreneurial opportunity structures and wider social structures and the use of life course studies
Year(s) Of Engagement Activity 2016
 
Description 'How Gender Affects Life-Course Pathways to Entrepreneurship', presentation at the ESRC Festival of Social Science event 'Developing Women's Enterprise to Create Sustainable Communities, at MMUBS. 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact a fruitful discussion around gender and life course pathways to entrepreneurship
Year(s) Of Engagement Activity 2014
 
Description 'Life Course and Entrepreneurship', invited presentation at Wolverhampton University. 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Other audiences
Results and Impact a presentation of research findings followed by questions and answer session
Year(s) Of Engagement Activity 2016
 
Description How Does Life Course Help Explain Entrepreneurial Behaviour and Earnings?', invited presentation to a seminar in the Small Business Research Centre, Kingston University. 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact use of life course and secondary data to understand entrepreneurial behaviour
Year(s) Of Engagement Activity 2015
 
Description Quantitative research using secondary data and multi-level analysis 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Primary Audience
Results and Impact A workshop was given at the Institute of Small Business and Entrepreneurship Doctoral Day on the use of secondary data and multi-level analysis. This drew on the Principal Investigator's experience of the project and used the British Household Panel Survey and the research techniques employed in the study as case studies. The research project was also presented as a case study.
Year(s) Of Engagement Activity
 
Description The Contribution of Mixed Methods to Researching Gender and Entrepreneurship', presentation at the Gender and Enterprise Network Seminar on 'Innovating Method: Researching Gender and Entrepreneurship', University of Ulster, Belfast. 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact selecting suitable research methods to research onto gender and entrepreneurship
Year(s) Of Engagement Activity 2014
 
Description The Role of Entrepreneurship and Small Enterprise in Regeneration', presentation made to Manchester City Council's Economy, Employment and Skill Task and Finish Group. 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact inform policy
Year(s) Of Engagement Activity 2011
 
Description When is Enterprise a Viable Option For Women Far From the Labour Market?', presentation at the ESRC Festival of Social Science event 'Developing Women's Enterprise to Create Sustainable Communities, at MMUBS. 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact a policy discussion and development of a future research agenda
Year(s) Of Engagement Activity 2014