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Self-Employment in Chile, long run trends and education and age structures changes

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Author Info
Esteban Puentes
Dante Contreras
Claudia Sanhueza ()

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Abstract

This paper studies long-term trends of self-employment in Chile. Self-employment is associated with poor job conditions, vulnerability, and instability or informal labor market. Contrary to what is expected, self- employment level does not respond to macroeconomic variables. Using forty-one cross sections of the longest Employment Survey available, we show that there is little correlation of the economic cycle with variations in self-employment. Cohort effects are also unimportant. In fact, age is the most important predictor of self- employment; older people are more likely to be self-employed. In addition, we performed a decomposition of changes in self-employment on changes in coefficients, which are a measure of the returns to individual characteristics, and on changes in characteristics. The results indicate that self-employment should have decreased given the changes in individual characteristics, but was prevented by changes in coefficients. We also find indirect evidence that these changes i

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File URL: http://econ.uchile.cl/public/Archivos/pub/61547f85-a324-4e9e-b1b1-065cde38891f.pdf
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Publisher Info
Article provided by University of Chile, Department of Economics in its journal Estudios de Economia.

Volume (Year): 34 (2007)
Issue (Month): 2 Year 2007 (December)
Pages: 203-247
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Handle: RePEc:udc:esteco:v:34:y:2007:i:2:p:203-247

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Web page: http://www.econ.uchile.cl/
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Related research
Keywords: Informal employment; cohort analysis; oaxaca decomposition.;

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Find related papers by JEL classification:
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

References listed on IDEAS
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  1. Ricardo Caballero G. & Eduardo Engel G. & Alejandro Micco A., 2004. "Microeconomic Flexibility in Latin America," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 7(2), pages 5-26, August. [Downloadable!]
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  2. Sebastian Edwards & Daniel Lederman, 1998. "The Political Economy of Unilateral Trade Liberalization: The Case of Chile," NBER Working Papers 6510, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Sebastian Edwards & Alejandra Cox Edwards, 2002. "Social Security Privatization Reform and Labor Markets: The Case of Chile," NBER Working Papers 8924, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," RES Working Papers 3095, Inter-American Development Bank, Research Department. [Downloadable!]
  5. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February. [Downloadable!] (restricted)
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  6. James J. Heckman & Carmen Pages, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," NBER Working Papers 7773, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Amuedo-Dorantes, Catalina, 2004. "Determinants and Poverty Implications of Informal Sector Work in Chile," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 347-68, January.
  8. Carmen Pagés & Claudio E. Montenegro, 2007. "Job security and the age-composition of employment: evidence from Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 109-139, December. [Downloadable!]
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