Stars and Misfits: Self-Employment and Labor Market Frictions
AbstractRecent evidence has shown that entrants into self-employment are disproportionately drawn from the tails of the earnings and ability distributions. This observation is explained by a multi-task model of occupational choice in which frictions in the labor market induces mismatches between firms and workers, and mis-assignment of workers to tasks. The model also yields distinctive predictions relating prior work histories to earnings and to the probability of entry into self-employment. These predictions are tested with the Korean Labor and Income Panel Study, from which we find considerable support for the model.
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Bibliographic InfoPaper provided by Florida International University, Department of Economics in its series Working Papers with number 1003.
Length: 37 pages
Date of creation: Mar 2010
Date of revision:
entreprenuership; self-employment; jack-of-all trades; skill complementarity;
Other versions of this item:
- Thomas Åstebro & Jing Chen & Peter Thompson, 2011. "Stars and Misfits: Self-Employment and Labor Market Frictions," Management Science, INFORMS, vol. 57(11), pages 1999-2017, November.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-21 (All new papers)
- NEP-ENT-2010-08-21 (Entrepreneurship)
- NEP-LAB-2010-08-21 (Labour Economics)
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