Fajnzylber, PabloMaloney, WilliamMontes Rojas, Gabriel2013-12-202013-12-202006-09-01World Bank Economic Reviewdoi:10.1093/wber/lhl005https://hdl.handle.net/10986/16438A rich panel data set from Mexico is used to study the patterns of entry, exit, and growth of microenterprises and to compare these with the findings of the mainstream theoretical and empirical work on firm dynamics. The Mexican self-employment sector is much larger than its counterpart in the United States, which is reflected in higher unconditional rates of entry into the sector. The evidence for Mexico points to the significant presence of well-performing salaried workers among the likely entrants into self-employment, as opposed to the higher incidence of poorer wageworkers among the entrants into the U.S. self-employment sector. Despite these differences, however, the patterns of entry, survival, and growth with respect to age, education, and many other covariates are very similar in Mexico and the United States. These strong similarities suggest that mainstream models of worker decisions and firm behavior are useful guides for policymaking for the developing-country microenterprise sector. Furthermore, they suggest that, as a first approximation, the developing-country microenterprise should probably be viewed as they are in the advanced countries as offering potentially desirable job opportunities to low-productivity workers.en-USCC BY-NC-ND 3.0 IGOAFFILIATEAGE GROUPATTRITIONBUSINESS FAILURECOLLEGE EDUCATIONCOLLEGE GRADUATESCOMPETITORSCOOPERATIVESCREATIVE DESTRUCTIONDEBTDEVELOPMENT ECONOMICSDISADVANTAGED WORKERSDISCUSSIONSDISGUISED UNEMPLOYMENTEARNINGECONOMETRICSEDUCATIONAL ATTAINMENTEMPLOYEEEMPLOYMENTEMPLOYMENT ALTERNATIVESEMPLOYMENT COMPOSITIONEMPLOYMENT DYNAMICSEMPLOYMENT GROWTHEMPLOYMENT GROWTH RATESEMPLOYMENT LEVELSEMPLOYMENT PROGRAMEMPLOYMENT RATEEMPLOYMENT RATESEMPLOYMENT REPORTEMPLOYMENT SIZEEMPLOYMENT STATUSENTREPRENEURENTREPRENEURIAL ABILITYENTREPRENEURSENTREPRENEURSHIPETHNIC MINORITIESEXPANSIONFIRM DYNAMICSFIRM EXITFIRM GROWTHFIRM SIZEFIRM SIZESFIRM SURVIVALFIRMSHOUSEHOLD INCOMEHOUSEHOLD SURVEYSHUMAN CAPITALINFORMAL LABOR MARKETSINFORMAL SECTORINTERNATIONAL LABOUR OFFICEINTERNATIONAL LABOUR ORGANIZATIONJOBSLABOR ECONOMICSLABOR FORCELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKET EXPERIENCELABOR MARKET POLICIESLABOR MARKETSLABOR REGULATIONLABOR TURNOVERLABOURLABOUR OFFICELARGE ENTERPRISESLOANMANUFACTURERSMANUFACTURING INDUSTRIESMICROENTERPRISESMIGRATIONMORTALITYMUNICIPALITIESNET JOB CREATIONNEW ENTRANTSOCCUPATIONOLDER WORKERSPAID WORKERSPOLITICAL ECONOMYPRIMARY EDUCATIONPRIVATE SECTORPRODUCTIVE EMPLOYMENTPRODUCTIVITY GROWTHPROFITABILITYSALARIED EMPLOYMENTSALARIED WORKERSALARIED WORKERSSEESSIZE OF FIRMSKILLED WORKERSSMALL BUSINESSSMALL BUSINESSESSMALL ENTERPRISESSMALL FIRMSMALL FIRMSSOCIAL SECURITYSUPPLIERSSURVIVAL ANALYSISSURVIVAL PROBABILITYTOTAL EMPLOYMENTTOTAL FACTOR PRODUCTIVITYUNEMPLOYEDUNEMPLOYED INDIVIDUALSUNEMPLOYED WORKERSUNEMPLOYMENT SPELLSUNPAID FAMILY WORKERSUNPAID WORKERSURBAN EMPLOYMENTURBAN EMPLOYMENT SURVEYURBAN WORKERSWAGE SECTORWAGESWORK FORCEWORKERYOUNG WORKERSJournal ArticleWorld Bank10.1596/16438