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Does self-employment increase the economic well-being of low-skilled workers?

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  • Magnus Lofstrom

Abstract

Low-skilled workers do not fare well in today’s skill intensive economy and their opportunities continue to diminish. Utilizing data from the survey of income and program participation, this paper provides an analysis of the economic returns to business ownership among low-skilled workers and addresses the essential question of whether self-employment is a good option for low-skilled individuals that policymakers might consider encouraging. The analysis reveals substantial differences in the role of self-employment among low-skilled workers across gender and nativity—women and immigrants are shown to be of particular importance from both the perspectives of trends and policy relevance. We find that, although the returns to low-skilled self-employment among men is higher than among women, the analysis shows that wage/salary employment is a more financially rewarding option for most low-skilled workers. Copyright Springer Science+Business Media, LLC. 2013

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  • Magnus Lofstrom, 2013. "Does self-employment increase the economic well-being of low-skilled workers?," Small Business Economics, Springer, vol. 40(4), pages 933-952, May.
  • Handle: RePEc:kap:sbusec:v:40:y:2013:i:4:p:933-952
    DOI: 10.1007/s11187-011-9402-z
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    2. Przemyslaw Zbierowski, 2015. "Positive Entrepreneurship: Antecedents and Outcomes of Entrepreneurship within Positive Organizational Scholarship (Przedsiebiorczosc pozytywna – przyczyny i rezultaty przedsiebiorczosci z zakresu poz," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(56), pages 38-54.
    3. Silke Tegtmeier & Agnieszka Kurczewska & Jantje Halberstadt, 2016. "Are women graduates jacquelines-of-all-trades? Challenging Lazear’s view on entrepreneurship," Small Business Economics, Springer, vol. 47(1), pages 77-94, June.
    4. Obschonka, Martin & Lee, Neil & Rodríguez-Pose, Andrés & Eichstaedt, johannes Christopher & Ebert, Tobias, 2018. "Big Data, artificial intelligence and the geography of entrepreneurship in the United States," OSF Preprints c62tn, Center for Open Science.
    5. Francesca Castellani & Eduardo Lora, 2014. "Is Entrepreneurship a Channel of Social Mobility in Latin America?," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 51(2), pages 179-194, November.
    6. Magnus Lofstrom, 2013. "Does self-employment increase the economic well-being of low-skilled workers?," Small Business Economics, Springer, vol. 40(4), pages 933-952, May.
    7. Pedro Spindler-Ruiz, 2021. "Mexican Niches in the US Construction Industry: 2009–2015," Journal of International Migration and Integration, Springer, vol. 22(2), pages 405-427, June.
    8. Magnus Lofstrom, 2011. "Low-skilled immigrant entrepreneurship," Review of Economics of the Household, Springer, vol. 9(1), pages 25-44, March.
    9. Magnus Lofstrom & Chunbei Wang, 2019. "Immigrants and entrepreneurship," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-85, June.
    10. Martin Obschonka & Neil Lee & Andrés Rodríguez-Pose & Johannes C. Eichstaedt & Tobias Ebert, 2020. "Big data methods, social media, and the psychology of entrepreneurial regions: capturing cross-county personality traits and their impact on entrepreneurship in the USA," Small Business Economics, Springer, vol. 55(3), pages 567-588, October.
    11. Yalcintas, Murat & Iyigun, Oykü & Karabulut, Gokhan, 2021. "Personal Characteristics and Intention for Entrepreneurship," GLO Discussion Paper Series 808, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Self-employment; Entrepreneurship; Low-skill; Women; Immigrants; J15; J16; J31; L26;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • 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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