Modeling the Incidence of Self‐Employment: Individual and Employment Type Heterogeneity

15 Pages Posted: 21 Sep 2011

See all articles by Sarah Brown

Sarah Brown

University of Sheffield - Department of Economics; IZA Institute of Labor Economics

Lisa Farrell

RMIT University

Mark N. Harris

Curtin University

Date Written: October 2011

Abstract

Modeling the incidence of self‐employment has traditionally proved problematic. Although the supply‐side characteristics of the self‐employed are well documented, we argue that the literature has neglected demand‐side aspects. We explore the determinants of self‐employment using the U.S. Survey of Consumer Finances. We present results from an econometric framework that allows us to model, separately and simultaneously, the influences of individual heterogeneity (i.e., supply‐side factors) and employment type heterogeneity (i.e., demand‐side factors) on the probability of self‐employment. Our findings suggest that while individual characteristics are important determinants of self‐employment, there are factors specific to the type of employment that influence self‐employment.

JEL Classification: J23, J33, C25, C10

Suggested Citation

Brown, Sarah and Farrell, Lisa and Harris, Mark N., Modeling the Incidence of Self‐Employment: Individual and Employment Type Heterogeneity (October 2011). Contemporary Economic Policy, Vol. 29, Issue 4, pp. 605-619, 2011. Available at SSRN: https://ssrn.com/abstract=1931328 or http://dx.doi.org/10.1111/j.1465-7287.2010.00232.x

Sarah Brown

University of Sheffield - Department of Economics

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lisa Farrell

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Mark N. Harris

Curtin University

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