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Are the Low Income Self-employed Poor?

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  • Bruce Bradbury

Abstract

Poverty measurement in Australia has typically excluded the self-employed because of concerns about a weak relationship between their measured incomes and their living standards. At the same time, however, families containing self-employed individuals receive substantial income support. Is this support well targeted? This paper compares the living standards of low-income self-employed families with low-income employee families using data from the ABS 1993-94 Household Expenditure Survey. The use of expenditure data for the measurement of living standards poses particular methodological problems, for which some new solutions are proposed. The provisional conclusions of the paper are that: average incomes are a poor indicator of the average living standards of the self-employed; poverty is greater among self-employed families; but, because of the weak association between income and expenditure for the self-employed, the average living standards of low-income self-employed are higher than employee families.

Suggested Citation

  • Bruce Bradbury, 1996. "Are the Low Income Self-employed Poor?," Discussion Papers 0073, University of New South Wales, Social Policy Research Centre.
  • Handle: RePEc:wop:sprcdp:0073
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    File URL: http://www.sprc.unsw.edu.au/dp/dp073.pdf
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    References listed on IDEAS

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    1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    4. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-965, July.
    5. Boyd Hunter, 1995. "The Social Structure of the Australian Urban Labour Market: 1976-1991," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(2), pages 65-79.
    6. Thursby, Jerry G., 1992. "A comparison of several exact and approximate tests for structural shift under heteroscedasticity," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 363-386.
    7. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    8. Gregory, R.G. & Hunter, B., 1995. "The Macro Economy and the Growth of Ghettos and Urban Poverty in Australia," CEPR Discussion Papers 325, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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    Cited by:

    1. Andersson Joona, Pernilla & Wadensjö, Eskil, 2004. "Why Do Self-Employed Immigrants in Denmark and Sweden Have Such Low Incomes?," IZA Discussion Papers 1280, Institute for the Study of Labor (IZA).
    2. Christoph Kneiding & Alexander S. Kritikos, 2013. "Funding self-employment -- the role of consumer credit," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1741-1749, May.
    3. Donal O'Neill & Olive Sweetman, 1999. "Poverty and Inequality in Ireland: A Comparison using Measures of Income and Consumption," Economics, Finance and Accounting Department Working Paper Series n860399, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.

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