Who are the Self-employed? A New Approach

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Who are the Self-employed? A New Approach

Author Info

Sarah Brown
Lisa Farrell
Mark N. Harris ()

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Abstract

Modelling the incidence of self-employment has traditionally proved problematic. Whilst the individual supply side characteristics of the self-employed are well documented, the literature has largely neglected (or misspecified) demand side aspects. In this paper we present results from an econometric framework that allows us to separately, and simultaneously, model the supply and demand side characteristics that determine employment outcomes. We show that whilst individual characteristics are important determinants of the type of employment contract that individuals hold, there are also important contract specific factors that influence the nature of the contract an individual is employed under. Our results suggest that workers may be "captive" to a particular type of employment because of the sector in which they work, the number of hours they prefer to work and their ethnicity. The results are based on a new estimator, the parameterised DOGEV model, which allows for ordering and correlation in the observed alternatives, and for captivity within an observed alternative.

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Publisher Info
Paper provided by Monash University, Department of Econometrics and Business Statistics in its series Monash Econometrics and Business Statistics Working Papers with number 11/03.

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Length: 38 pages
Date of creation: May 2003
Date of revision:
Handle: RePEc:msh:ebswps:2003-11

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Paper
- Brown, Sarah & Lisa Farrell & Mark N Harris, 2003. "Who are the Self-employed? A New Approach," Royal Economic Society Annual Conference 2003 31, Royal Economic Society. [Downloadable!]

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-05-29 (All new papers)
NEP-ENT-2003-06-04 (Entrepreneurship)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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.
Kidd, M.P., 1993. "Immigrant Wage Differentials and the Role of Self-Employment in Australia," CEPR Discussion Papers 291, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University.
Other versions:
- Kidd, M.P., 1990. "Immigrant Wage Differentials And The Role Of Self- Employment In Australia," Papers 1990-07, Tasmania - Department of Economics.
- Kidd, Michael P, 1993. "Immigrant Wage Differentials and the Role of Self-Employment in Australia," Australian Economic Papers, Blackwell Publishing, vol. 32(60), pages 92-115, June.
Borooah, Vani K & Hart, Mark, 1999. " Factors Affecting Self-Employment among Indian and Black Caribbean Men in Britain," Small Business Economics, Springer, vol. 13(2), pages 111-29, September. [Downloadable!] (restricted)
George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Le, Anh T, 1999. " Empirical Studies of Self-Employment," Journal of Economic Surveys, Blackwell Publishing, vol. 13(4), pages 381-416, September. [Downloadable!] (restricted)
Gaundry, Marc J. I. & Dagenais, Marcel G., 1979. "The dogit model," Transportation Research Part B: Methodological, Elsevier, vol. 13(2), pages 105-111, June. [Downloadable!] (restricted)
Michael Hout & Harvey S. Rosen, 1999. "Self-Employment, Family Background, and Race," NBER Working Papers 7344, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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)
Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January. [Downloadable!] (restricted)
Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September. [Downloadable!] (restricted)
Johansson, Edvard, 2000. " Self-Employment and Liquidity Constraints: Evidence from Finland," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(1), pages 123-34, March. [Downloadable!] (restricted)
Sarah Brown & Lisa Farrell & John G Sessions, 2001. "Employment Contract Matching: An Analysis of Dual Earner Couples and Working Households," Discussion Papers in Economics 01/9, Department of Economics, University of Leicester. [Downloadable!]
Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June. [Downloadable!] (restricted)
Tim R.L. Fry & Mark N. Harris, 2002. "The DOGEV Model," Monash Econometrics and Business Statistics Working Papers 7/02, Monash University, Department of Econometrics and Business Statistics. [Downloadable!]
Blanchflower, D. & Oswald, A., 1990. "What Makes A Young Entrepreneur?," Papers 373, London School of Economics - Centre for Labour Economics.
Other versions:
- David G. Blanchflower & Andrew J. Oswald, 2007. "What Makes a Young Entrepreneur," IZA Discussion Papers 3139, Institute for the Study of Labor (IZA). [Downloadable!]
Small, Kenneth A, 1987. "A Discrete Choice Model for Ordered Alternatives," Econometrica, Econometric Society, vol. 55(2), pages 409-24, March. [Downloadable!] (restricted)
Alan Duncan & Mark N. Harris, 2001. "Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia," Melbourne Institute Working Paper Series wp2001n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
Other versions:
- Duncan, Alan & Harris, Mark N, 2002. "Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 264-76, September. [Downloadable!] (restricted)
Sarah Brown & Lisa Farrell & Mark N. Harris & John G. Sessions, 2002. "Risk Preference And Employment Contract Type," Department of Economics - Working Papers Series 845, The University of Melbourne. [Downloadable!]
Other versions:
- Sarah Brown & Lisa Farrell & Mark N. Harris & John G. Sessions, 2006. "Risk preference and employment contract type," Journal Of The Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 849-863. [Downloadable!] (restricted)
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)
Other versions:
- George J. Borjas & Stephen G. Bronars, 1989. "Consumer Discrimination and Self-Employment," NBER Working Papers 2627, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Calvo, Guillermo A & Wellisz, Stanislaw, 1980. "Technology, Entrepreneurs, and Firm Size," The Quarterly Journal of Economics, MIT Press, vol. 95(4), pages 663-77, December. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Sindy A. González & Héctor J. Villarreal, 2006. "More Pushed than Pulled: Self-employment in rural Mexico ten years after NAFTA," Working Papers 20063, Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey, revised Nov 2006. [Downloadable!]

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