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Differences in the earnings distribution of self- and dependent emploxed German men - evidence from a quantile regression decomposition analysis

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Author Info
Nils Braakmann () (Institute of Economics, Leuphana University of Lüneburg)

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Abstract

This paper uses data from the German Socio-Economic Panel of the years 2000 to 2005 to study the earnings differential between self- and dependent employed German men. Constructing a counterfactual earnings distribution for the self-employed German dependant employment and using quantile regression decompositions we find that the earnings differential over the distribution cannot be explained by differences in endowments. Furthermore, low-earning self-employed could earn more in dependent employment. Finally, the observed earnings advantage for the self-employed at the top of the earnings distribution os not associated with higher returns to observable variables.

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Publisher Info
Paper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 55.

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Length: 24 pages
Date of creation: Jul 2007
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Handle: RePEc:lue:wpaper:55

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Related research
Keywords: self-employment; earnings differential; quantile regression decomposition; Machado/Mata decomposition;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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  1. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-66, May.
  2. Robson, Martin T, 1997. "The Relative Earnings from Self and Paid Employment: A Time-Series Analysis for the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(5), pages 502-18, November. [Downloadable!] (restricted)
  3. Irwin Bernhardt, 1994. "Comparative Advantage in Self-Employment and Paid Work," Canadian Journal of Economics, Canadian Economics Association, vol. 27(2), pages 273-89, May. [Downloadable!] (restricted)
  4. Headen, Alvin E, Jr, 1990. "Wage, Returns to Ownership, and Fee Responses to Physician Supply," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 30-37, February. [Downloadable!] (restricted)
  5. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-34, July-Sept. [Downloadable!] (restricted)
  6. Dolton, Peter J & Makepeace, G H, 1990. "Self Employment among Graduates," Bulletin of Economic Research, Blackwell Publishing, vol. 42(1), pages 35-53, January.
  7. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465. [Downloadable!]
  8. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June. [Downloadable!] (restricted)
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  9. James Albrecht & Anders Bjorklund & Susan Vroman, 2003. "Is There a Glass Ceiling in Sweden?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 145-177, January. [Downloadable!]
    Other versions:
  10. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30. [Downloadable!]
  11. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June. [Downloadable!] (restricted)
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