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Journal Article
North Texas income dip may reflect decline in education
Working Paper
Self-employment as an alternative to unemployment
Data from the NLSY show that more than a quarter of all younger men experience some period of self- employment. Many of them return to wage work. This paper analyzes a simple model of job search and self- employment where self- employment provides an alternative source of income for unemployed workers. Self- employment is distinct from wage sector employment in two important respects. First, self- employment is a low-income, low- variation alternative to wage work. Second, once a worker enters self-employment, he loses eligibility to receive unemployment insurance benefits?at least until he ...
Journal Article
The self-employment duration of younger men over the business cycle
Spells of self-employment for younger men are typically of short duration with slightly more than half lasting two years or less. This article examines factors that lead to longer durations, focusing on the role of cyclical factors in distinguishing entrepreneurs from discouraged wage workers.
Working Paper
Are household surveys like tax forms: evidence from income underreporting of the self-employed
There is a large literature showing that the self-employed underreport their income to tax authorities. In this paper, we quantify the extent to which the self-employed also systematically underreport their income in U.S. household surveys. To do so, we use the Engel curve describing the relationship between income and expenditures of wage and salary workers to infer the actual income, and thus the reporting gap, of the self-employed based on their reported expenditures. We find that the self-employed underreport their income by about 30 percent. This result is remarkably robust across data ...
Working Paper
Credit and self-employment
Limited personal liability for debts has long been justified as a tool to promote entrepreneurial risk taking by providing insurance to the borrower in the event of low returns. Nonetheless, such limits erode repayment incentives, and so may increase unsecured borrowing costs. Our paper is the first to evaluate the tradeoff between credit costs and insurance against failure. We build a life-cycle model with risky, and repeated, occupational choice in the presence of defaultable debt contracts. We find that limits to liability can encourage self-employment, and alter the timing, size, and ...
Newsletter
Self-employed immigrants: an analysis of recent data
This article identifies the factors that influence the self- employment decision for U.S. immigrants, including human capital, years in the U.S., geographic concentration, and labor market characteristics.
Journal Article
The Great Recession’s effect on entrepreneurship
Though the recent recession was the worst downturn since the Great Depression, some observers argue that one silver lining is an upswing in entrepreneurship. Recessions, they claim, provide laid-off workers with the motivation to start their own businesses, and a recent study suggests that in 2009 the number people becoming self employed spiked to its highest level in more than a decade. Unfortunately, a careful look at multiple sources of data shows that the Great Recession was actually a time of considerable decline in entrepreneurial activity in the United States.>
Journal Article
Do ethnic enclaves and networks promote immigrant self-employment?
The author assesses how ethnic enclaves and networks affect the self-employment decisions of immigrants in the U.S. She finds that ethnic networks play a positive role in the likelihood that immigrants will choose self-employment as an alternative to wage employment. However, there is no clear impact of ethnic geographical concentrations on the self-employment decision.
Journal Article
Wanted: Entrepreneurs (just don't ask for a job description)
If entrepreneurship is so important, why don't we know more about it?