Artikel

Self-employment in an equilibrium model of the labor market

Self-employed workers account for between 8 and 30 % of participants in the labor markets of OECD countries (Blanchower, Self-employment: more may not be better, 2004). This paper develops and estimates a general equilibrium model of the labor market that accounts for this sizable proportion. The model incorporates self-employed workers, some of whom hire paid employees in the market. Employment rates and earnings distributions are determined endogenously and are estimated to match their empirical counterparts. The model is estimated using the British Household Panel Survey (BHPS). The model is able to estimate nonpecuniary amenities associated with employment in different labor market states, accounting for both different employment dynamics within state and the misreporting of earnings by self-employed workers. Structural parameter estimates are then used to assess the impact of an increase in the generosity of unemployment benefits on the aggregate employment rate. Findings suggest that modeling the self-employed, some of whom hire paid employees implies that small increases in unemployment benefits leads to an expansion in aggregate employment.

Language
Englisch

Bibliographic citation
Journal: IZA Journal of Labor Economics ; ISSN: 2193-8997 ; Volume: 5 ; Year: 2016 ; Issue: 6 ; Pages: 1-30 ; Heidelberg: Springer

Classification
Wirtschaft
Labor Force and Employment, Size, and Structure
Human Capital; Skills; Occupational Choice; Labor Productivity
Safety; Job Satisfaction; Related Public Policy
Unemployment: Models, Duration, Incidence, and Job Search
Subject
Self-employment
Job search
Firm growth

Event
Geistige Schöpfung
(who)
Bradley, Jake
Event
Veröffentlichung
(who)
Springer
(where)
Heidelberg
(when)
2016

DOI
doi:10.1186/s40172-016-0046-8
Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Artikel

Associated

  • Bradley, Jake
  • Springer

Time of origin

  • 2016

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