Arbeitspapier

Estimating labor supply in self-employment: Pitfalls and resolutions

The small extant literature on the working hours of self-employed workers is deficient, because it often lacks a clear theoretical underpinning and suffers from three common mistakes: including the hourly wage as an explanatory variable, controlling for input factors of production, and not considering endogenous selection of self-employed workers. I introduce a structural causal model that makes clear that neither the wage nor input factors such as the number of employees or the amount of capital invested are determinants of working hours in self-employment. It also shows why selection bias arises when using a sample of self-employed individuals. I present an empirical discrete choice labor supply model that resolves these issues. Estimating this model with German data, I find that both non-labor income and education negatively affect labor supply in self-employment.

Sprache
Englisch

Erschienen in
Series: Diskussionspapiere ; No. 101

Klassifikation
Wirtschaft
Time Allocation and Labor Supply
Labor Demand
Thema
Germany
labor supply
self-employment
SOEP
structural causal model
working hours

Ereignis
Geistige Schöpfung
(wer)
Lechmann, Daniel S. J.
Ereignis
Veröffentlichung
(wer)
Friedrich-Alexander-Universität Erlangen-Nürnberg, Lehrstuhl für Arbeitsmarkt- und Regionalpolitik
(wo)
Nürnberg
(wann)
2017

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Lechmann, Daniel S. J.
  • Friedrich-Alexander-Universität Erlangen-Nürnberg, Lehrstuhl für Arbeitsmarkt- und Regionalpolitik

Entstanden

  • 2017

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