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A General Equilibrium Self-Employment Theory based on Human Capital Differences

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  • Gerardo Jacobs
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    Abstract

    Since a big proportion of the labor force in developing countries belongs to the self-employment sector, it is desirable to build models to study these dynamics. Previous works study the occupational choices of agents. The most recent ones build general equilibrium economies with three types of agents: entrepreneurs, workers and self-employees. Unfortunately, in theses works at equilibrium, workers are poorer than agents in self-employment. Data for developing countries shows that self-employment provides a subsistence level for most agents, with workers earning a higher level of income. This work builds a general equilibrium model that is consistent with this observation

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    File URL: http://repec.org/esLATM04/up.21966.1082069047.pdf
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    Bibliographic Info

    Paper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 270.

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    Date of creation: 11 Aug 2004
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    Handle: RePEc:ecm:latm04:270

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    Keywords: Self-Employment;

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    1. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April.
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