Can working conditions explain the return-to-entrepreneurship puzzle?
AbstractMost self-employed would apparently earn higher earnings if they were working in paid employment. One explanation for this 'return-to-entrepreneur-ship puzzle' could be that entrepreneurship entails substantial non-monetary bene-fits, such as autonomy, flexibility, and task variety. Utilizing German data and a de-composition analysis, this study examines the contribution of such working condi-tions to the observed earnings differential between self-employment and paid em-ployment. The results imply that working conditions differences do not contribute to resolve the return-to-entrepreneurship puzzle. Rather, (mis-)measurement of earnings seems to be an issue. -- Die meisten Selbständigen könnten als abhängig Beschäf-tigte anscheinend höhere Einkünfte erzielen. Möglicherweise arbeiten sie dennoch weiterhin als Selbständige, weil die Selbständigkeit nicht-monetäre Vorteile, wie etwa mehr Autonomie, Flexibilität und Abwechslung, mit sich bringt. Unter Verwendung eines Datensatzes deutscher Erwerbstätiger und mittels einer Zerlegungsanalyse untersucht diese Studie, inwiefern Unterschiede in solchen Arbeitsbedingungen die Unterschiede in den Einkünften zwischen Selbständigen und abhängig Beschäftigten erklären könnten. Die Ergebnisse deuten darauf hin, dass Unterschiede in den Arbeitsbedingungen nicht dazu beitragen, die (zu) niedrigen Einkünfte der Selbstän-digen zu erklären. Vielmehr scheinen Schwierigkeiten bei der Messung der Einkünfte eine Rolle zu spielen.
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Bibliographic InfoPaper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 86.
Date of creation: 2013
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More information through EDIRC
compensating differentials; Germany; returns to entrepreneurship; self-employment; working conditions;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-16 (All new papers)
- NEP-CWA-2013-11-16 (Central & Western Asia)
- NEP-LAB-2013-11-16 (Labour Economics)
- NEP-LMA-2013-11-16 (Labor Markets - Supply, Demand, & Wages)
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