Compensating Wage Differentials among Self-Employed Workers:Evidence from Job Satisfaction Scores
Previous studies have found that self-employed workers with long business tenure earn less than other workers with similar characteristics. This difference in earnings can be explained by the compensating wage differential theory when self-employed jobs have attractive non-earnings aspects. Using the National Longitudinal Survey of Youth 79 (NLSY79), I test whether moves in and out of self-employment are associated with changes in recorded job satisfaction scores. By looking at changes in individualsf job satisfaction over time, I overcome the difficulty of interpreting differences in subjective job satisfaction scores across individuals associated with cross-sectional analysis. Using my estimates, I calculate the monetary value of the non-pecuniary aspects of self-employment and find that the value of self-employment in terms of job satisfaction is sufficiently high enough to support the compensating differential hypothesis as an explanation for lower earnings among self-employed workers.
|Date of creation:||Jun 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iser.osaka-u.ac.jp/index-e.html
More information through EDIRC
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.:
- Clark, Andrew E. & Oswald, Andrew J., 1996.
"Satisfaction and comparison income,"
Journal of Public Economics,
Elsevier, vol. 61(3), pages 359-381, September.
- Freeman, Richard B, 1978.
"Job Satisfaction as an Economic Variable,"
American Economic Review,
American Economic Association, vol. 68(2), pages 135-41, May.
- Blanchflower, D.G. & Oswald, A., 1991.
"What Makes an Entrepreneur?,"
Economics Series Working Papers
99125, University of Oxford, Department of Economics.
- Daniel S. Hamermesh, 1999.
"The Changing Distribution of Job Satisfaction,"
NBER Working Papers
7332, National Bureau of Economic Research, Inc.
- George J. Borjas & Stephen G. Bronars, 1988.
"Consumer Discrimination and Self-Employment,"
NBER Working Papers
2627, National Bureau of Economic Research, Inc.
- Jovanovic, Boyan, 1979.
"Job Matching and the Theory of Turnover,"
Journal of Political Economy,
University of Chicago Press, vol. 87(5), pages 972-90, October.
- George J. Borjas, 1979. "Job Satisfaction, Wages, and Unions," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 21-40.
- 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.
- 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.
- 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.
- Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
- Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
- 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.
- Lazear, Edward P & Moore, Robert L, 1984. "Incentives, Productivity, and Labor Contracts," The Quarterly Journal of Economics, MIT Press, vol. 99(2), pages 275-96, May.
- Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0568. 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: (Fumiko Matsumoto)
If references are entirely missing, you can add them using this form.