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- Following the unprecedented increase in the self-employment rates in South Africa, the study probes the determinants of self-employment relative to being a wage earner within the context of black owned businesses in Ladysmith, KZN. A questionnaire was administered to 450 respondents comprising 299 gainfully employed and 151 self- employed blacks, using a combination of convenience and snowball sampling for the self- employed and random methods to identify wage/salary earners. The study employed a logistic regression model to estimate the probability of being self-employed relative to being a wage/salary earner focusing on household income per capita, education, age, marital status, family business background, risk propensity, gender and access to finance as independent variables, gathered from the questionnaire, to shed new light on self- employment determinants. The study used the Hosmer-Lemeshow test to assess goodness of fit and the Wald test to assess the contribution of individual predictors in the model. Supported by descriptive statistics and chi squared test, the logistic results showed a positive and meaningful relationship between self-employment and age suggesting that as one becomes older each year increases the probability of being self-employed by 3.27%. With regards to gender, the results showed a positive relationship suggesting that being female increases the possibility of being self-employed by 57.35%. On the other hand, marital status results suggested that being single decreases the chances of being self-employed by 55.56% indicating that single people are more likely to be gainfully employed. Furthermore results revealed that an additional year of education increases the possibility of being of self-employed by 13.07%. When a person has a family business background, the possibility of that person being self-employed is higher by 146%, and lastly, increased funding opportunities cause an increase in self-employment by 397%.
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- Orientation: The study seeks to provide an in-depth understanding of the determinants of self-employment within the context of black entrepreneurs. Research purpose: Given the unprecedented increase in self-employment, because of reduction in formal job opportunities in South Africa, the primary objective of this study was to probe the determinants of self-employment relative to being a wage earner among black people in Ladysmith. Motivation for the study: The study investigated the determinants of self-employment through the use of the logistic modelling technique as its primary focus. Research design, approach and method: The study employed both probability and non probability sampling techniques. The convenience and snowball sampling methods were used to locate all targeted entrepreneurs while the systematic random sampling method was used to locate the wage earners. A total of 450 respondents were interviewed through face-to-face administered questionnaires. The data collected was statistically analysed, using SPSS to acquire the descriptive statistics and EViews software to obtain logistic regression results and the related diagnostic tests (Hosmer–Lemeshow test and Wald statistics). Main findings: All the variables, except for household income per capita, were statistically significant, indicating that they were plausible predictors of self-employment. Practical/managerial implications: Financial life skills and entrepreneurship training ought to be embedded in all learning programmes at the primary, secondary and tertiary levels. In particular, all young persons through whatever skills development programme – including those offered at in-service and/or work-related training – they are given access to, must be taught to develop an entrepreneurial mind-set. Contribution/value-add: A combination of skills development and guidance-based access to finance to targeted groups involving women, the young adults at schools and tertiary institutions and entrepreneurial adults are likely to reap significant outcomes.
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