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Comparative Advantage in Self-Employment and Paid Work

  • Irwin Bernhardt
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    The author reports a study of self-employment/paid-work choice, based on a representative sample of white Canadian men. The main findings are as follows: relative potential earnings is the main choice determinant; potential earnings differences between groups is primarily due to unobserved factors: market values of observed characteristics are similar between groups and relative potential earnings, based only on observed characteristics, are not an explainer of choice; and paid workers have higher potential earnings in both sectors, with a greater advantage in paid work. But the apparent comparative advantage is not significant.

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    Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

    Volume (Year): 27 (1994)
    Issue (Month): 2 (May)
    Pages: 273-89

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    Handle: RePEc:cje:issued:v:27:y:1994:i:2:p:273-89
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