The Heterogeneous Self-Employed in Occupational Choice Models with Market Frictions

42 Pages Posted: 15 Jun 2012

See all articles by Vicente Salas-Fumás

Vicente Salas-Fumás

University of Zaragoza - Department of Business Administration and Organization

J. Javier Sanchez-Asin

University of Zaragoza - Department of Business Administration and Organization

Luis Medrano-Adan

Centro Universitario de la Defensa (Zaragoza)

Date Written: April 14, 2012

Abstract

The self-employed and entrepreneurs form a heterogeneous group: some individuals are pushed to become self-employed because they cannot find a job as employees, while others voluntarily choose self-employment to exploit business opportunities; among those who choose by opportunity, some hire employees, while others do not. This paper models market equilibrium from occupational choices in economies with market frictions and solves for conditions that can explain the observed heterogeneity among self-employed individuals. It also provides comparative static analysis of changes in the equilibrium results of both self-employment rates and output, from changes in the technological, institutional and organizational factors determining market equilibrium. The results can explain certain puzzling empirical findings reported in the literature about the relationships between self-employment and economic development. This paper provides additional empirical evidence on the U-shaped relationship between skills and entrepreneurial rates with Spanish data, and documents the growing number of voluntary own account self-employed.

Keywords: Occupational choices, voluntary and involuntary self-employment, entrepreneurship, entrepreneurial skills

JEL Classification: J24, K31, L26, D24

Suggested Citation

Salas-Fumás, Vicente and Sanchez-Asin, J. Javier and Medrano-Adan, Luis, The Heterogeneous Self-Employed in Occupational Choice Models with Market Frictions (April 14, 2012). Available at SSRN: https://ssrn.com/abstract=2084143 or http://dx.doi.org/10.2139/ssrn.2084143

Vicente Salas-Fumás (Contact Author)

University of Zaragoza - Department of Business Administration and Organization ( email )

Dr. Cerrada 1
5005 Zaragoza
Spain
+34 976 761803 (Phone)

J. Javier Sanchez-Asin

University of Zaragoza - Department of Business Administration and Organization ( email )

Gran Via, 2
Zaragoza, ZARAGOZA 50005
Spain
+34669434726 (Phone)
+34976558549 (Fax)

Luis Medrano-Adan

Centro Universitario de la Defensa (Zaragoza) ( email )

Carretera de Huesca
Zaragoza, Zaragoza 50090
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
108
Abstract Views
1,213
Rank
453,810
PlumX Metrics