Self-Employment Rents : Evidence from Job Satisfaction Scores
Previous studies have pointed to the existence of barriers at the entry of self-employed sectors, such as liquidity constraints. In many countries, policies are directed toward removing these barriers in order to promote entrepreneurial activity. This paper examines whether such barriers exist by examining the amount of rent enjoyed by self-employed workers; if there are no barriers between the self-employed sector and the salary/wage sector, self-employed workers should not enjoy rents. Examination of the rent associated with self-employment, however, cannot simply be accomplished by comparing the incomes of self-employed and salary/wage workers. This is because self-employed workers may enjoy higher utility due to their work environment, with such benefits as autonomy and flexibility of work schedules. To overcome the difficulty of measuring self-employment rents, I use self-reported job satisfaction from the National Longitudinal Survey of Youth 79 (NLSY79) to capture workers' overall satisfaction with their jobs. The results robustly indicate that self-employed workers are more satisfied with their jobs than salary/wage workers, even after allowing for the time-invariant individual heterogeneity in their reported job satisfaction. This result suggests that there are barriers at the entry into self-employment and that self-employed workers enjoy rents.
Volume (Year): 49 (2008)
Issue (Month): 1 (June)
|Contact details of provider:|| Phone: +81-42-580-8000|
Web page: http://www.econ.hit-u.ac.jp/
More information through EDIRC
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.:
- Blanchflower, D.G. & Oswald, A., 1991.
"What Makes an Entrepreneur?,"
Economics Series Working Papers
99125, University of Oxford, Department of Economics.
- Richard B. Freeman, 1977.
"Job Satisfaction as an Economic Variable,"
NBER Working Papers
0225, National Bureau of Economic Research, Inc.
- Ada Ferrer-i-Carbonell & Paul Frijters, 2004.
"How Important is Methodology for the estimates of the determinants of Happiness?,"
Royal Economic Society, vol. 114(497), pages 641-659, 07.
- Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1993.
"Entrepreneurial Decisions and Liquidity Constraints,"
NBER Working Papers
4526, National Bureau of Economic Research, Inc.
- Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
- Holtz-Eakin, D. & Joulfaian, D. & Rosen, H.S., 1992. "Entrepreneurial Decisions and Liquidity Constraints," Papers 129, Princeton, Department of Economics - Financial Research Center.
- Carrington, William J & McCue, Kristin & Pierce, Brooks, 1996. "The Role of Employer-Employee Interactions in Labor Market Cycles: Evidence from the Self-Employed," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 571-602, October.
- Clark, Andrew E., 2001. "What really matters in a job? Hedonic measurement using quit data," Labour Economics, Elsevier, vol. 8(2), pages 223-242, May.
- Taylor, Mark P, 2001.
"Self-Employment and Windfall Gains in Britain: Evidence from Panel Data,"
London School of Economics and Political Science, vol. 68(272), pages 539-65, November.
- Taylor, Mark P, 1999. "Self-Employment and Windfall Gains in Britain: Evidence From Panel Data," CEPR Discussion Papers 2084, C.E.P.R. Discussion Papers.
- Jeffrey M. Wooldridge, 2001.
"Econometric Analysis of Cross Section and Panel Data,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262232197, March.
- Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, March.
- Tobias J. Moskowitz & Annette Vissing-Jorgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," NBER Working Papers 8876, National Bureau of Economic Research, Inc.
- Tobias J. Moskowitz & Annette Vissing-Jørgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," American Economic Review, American Economic Association, vol. 92(4), pages 745-778, September.
- Kawaguchi, Daiji, 2003.
"Human capital accumulation of salaried and self-employed workers,"
Elsevier, vol. 10(1), pages 55-71, February.
- Kawaguchi, D., 2001. "Human Capital Accumulation of Salaried and Self-Employed Workers," ISER Discussion Paper 0530, Institute of Social and Economic Research, Osaka University.
- Frijters, Paul, 2000. "Do individuals try to maximize general satisfaction?," Journal of Economic Psychology, Elsevier, vol. 21(3), pages 281-304, June.
- Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-26, November.
- Andrew Clark & Yannis Georgellis & Peter Sanfey, .
"Job Satisfaction, Wage changes and Quits: Evidence from Germany,"
Economics and Finance Discussion Papers
98-06, Economics and Finance Section, School of Social Sciences, Brunel University.
- Andrew Clark & Yannis Georgellis & Peter Sanfey, 1997. "Job Satisfaction, Wage Changes and Quits: Evidence from Germany," Studies in Economics 9711, School of Economics, University of Kent.
- 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.
- Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
When requesting a correction, please mention this item's handle: RePEc:hit:hitjec:v:49:y:2008:i:1:p:35-45. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library)
If references are entirely missing, you can add them using this form.