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From complements to substitutes: Structural breaks in the elasticity of substitution between paidemployment and self-employment in the US

  • Emilio Congregado
  • Vicente Esteve
  • Antonio A. Golpe

This paper provides estimates of the elasticity of substitution between operational and managerial jobs in the US economy during the years 1969- 2011. Estimating the long-term relationship between the aggregate employment/self-employment ratio and the returns from paid-employment relative to self-employment and testing for structural breaks, we report different estimates of the elasticity of substitution in each of the three regimes identified. Our results help to understand and interpret one of the most intriguing aspects in the evolution of self-employment rates in developed countries.

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Paper provided by Instituto Universitario de Análisis Económico y Social in its series Working Papers with number 09/13.

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Length: 23 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:uae:wpaper:0913
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