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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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    4. Skrzek-Lubasińska, Małgorzata & Szaban, Jolanta M., 2019. "Nomenclature and harmonised criteria for the self-employment categorisation. An approach pursuant to a systematic review of the literature," European Management Journal, Elsevier, vol. 37(3), pages 376-386.
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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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