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Self-Employment Within the Firm

Author

Listed:
  • Vittorio Bassi
  • Jung Hyuk Lee
  • Alessandra Peter
  • Tommaso Porzio
  • Ritwika Sen
  • Esau Tugume

Abstract

We study the internal organization of manufacturing firms in Uganda. We measure what people do within firms and find limited specialization, far below what is feasible given the prevailing production process and average firm size of 5.7 workers. We build and estimate an occupational choice model in which firm size, productivity, and specialization arise endogenously. The model shows that firms in this setting are largely “self-employment in disguise” and generate just a 20% productivity gain over literal self-employment. In a counterfactual economy with full specialization, the same aggregate output can be produced with an average firm size of only 1.6.

Suggested Citation

  • Vittorio Bassi & Jung Hyuk Lee & Alessandra Peter & Tommaso Porzio & Ritwika Sen & Esau Tugume, 2023. "Self-Employment Within the Firm," NBER Working Papers 31740, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31740
    Note: DEV EFG ITI LS PR
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    Cited by:

    1. Hardy, Morgan & Kim, Seongyoon & McCasland, Jamie & Menzel, Andreas & Witte, Marc, 2024. "Allocating labor across small firms: Experimental evidence on information constraints," Journal of Development Economics, Elsevier, vol. 171(C).

    More about this item

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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