Entrepreneurship and Income Inequality

51 Pages Posted: 13 Nov 2017

See all articles by Daniel Halvarsson

Daniel Halvarsson

Ratio Institute

Martin Korpi

Ratio Institute

Karl Wennberg

Linkoping University - Institute for Analytical Sociology (IAS)

Date Written: November 9, 2017

Abstract

Entrepreneurship research highlights entrepreneurship as a simultaneous source of enhanced income mobility for some but a potential source of poverty for others. Research on inequality has furthered new types of models to decompose and problematize various sources of income inequality, but attention to entrepreneurship as an increasingly prevalent occupational choice in these models remains scant. This paper seeks to bridge these two literatures using regression-based income decomposition among entrepreneurs and paid workers distinguishing between self-employed (SE) and incorporated self-employed (ISE) individuals in Sweden. We find that the proportion of self-employed in the workforce increases income dispersion by way of widening the bottom end of the distribution, whereas the proportion of incorporated self-employed contributes to income dispersion at the top end of the distribution. Implications for research are discussed.

Keywords: Inequality, Entrepreneurship, Income Decomposition

JEL Classification: J31, J24, L26, 015

Suggested Citation

Halvarsson, Daniel and Korpi, Martin and Wennberg, Karl, Entrepreneurship and Income Inequality (November 9, 2017). Journal of Economic Behavior and Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3068217

Daniel Halvarsson

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Martin Korpi

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Karl Wennberg (Contact Author)

Linkoping University - Institute for Analytical Sociology (IAS) ( email )

Norrköping, 601 74
Sweden

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