Abstract
This study investigates the self-employment in Hong Kong. Self-employment has become increasingly attended in recent decades because of its function of generating employment and economic growth. Hong Kong as an important developed economy in the world, only a few research investigated the topic in Hong Kong. The purpose of this thesis is to study the self-employment in Hong Kong, in order to fill the gap. In addition, the data showed that the self-employment rate in Hong Kong had a big jump between 2000 and 2001. In the same year, the Hong Kong government introduced a new pension system, which has raised a lot of debates regarding its impact on the labor market. This thesis also examines this issue. The General Household Survey dataset is used in this study. Quarterly data ranging from 1985Q1 to 2011Q2 are used for macro analysis; ten quarters of individual data are used for micro analysis. The error correction model is adopted for macro analysis; the probit and the bivariate probit model are used for micro analysis. The findings show that there are some evidence supporting the recession-push hypothesis, particularly in the construction industry. Regarding the probability of being self-employed, age has a positive effect but formal schooling has no effect on self-employment. Financial resource increases one’s probability of becoming self-employed and males are more likely to be self-employed. Regarding the big jump, this study concludes that the pension system has certain effect on the self-employment rate in the construction industry.