Arbeitspapier
Self-employment and development
Selection into self-employment among the poor is dominated by subsistence concerns, which leads to high levels of unproductive self-employment in developing countries. We incorporate this view into an otherwise benchmark macro-development model by allowing for labor frictions. Standard models that rely only on financial frictions are at odds with crucial features of the data, including large self-employment rates among the poor and the response of labor markets after well-identified labor demand shocks. We study the efficacy of a wide range of development policies on occupational choices, prices, and productivity. We find that providing unemployment benefits improves selection into self-employment, increasing total-factor productivity (TFP). Self-employment grants and unconditional transfers lower TFP by making self-employment more attractive to low-productivity individuals. Finally, financial reforms that improve access to credit succeed in raising productivity, but they do not address the subsistence concerns of poor individuals. Self-employment is still concentrated among the poor after the reforms take place.
- Sprache
-
Englisch
- Erschienen in
-
Series: CHCP Working Paper ; No. 2020-9
- Klassifikation
-
Wirtschaft
Financial Markets and the Macroeconomy
Macroeconomic Analyses of Economic Development
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- Thema
-
Self-Employment
Unemployment
Development
Micro-Finance
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Herreño, Juan
Ocampo Díaz, Sergio
- Ereignis
-
Veröffentlichung
- (wer)
-
The University of Western Ontario, Centre for Human Capital and Productivity (CHCP)
- (wo)
-
London (Ontario)
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:46 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Herreño, Juan
- Ocampo Díaz, Sergio
- The University of Western Ontario, Centre for Human Capital and Productivity (CHCP)
Entstanden
- 2020