Increase In Self-employment Research Articles

Rethinking legal taxonomies for the gig economy

Both tax law and employment law incentivize engagers of labour to structure their workforce as a crowd of self-employed micro-entrepreneurs. Recent technological change and the rise of the gig economy have made it easier for agents to respond to these incentives, contributing to an increase in self-employment. In this article, we review the evidence on the rise of the gig economy in the UK and lay out a set of key principles to guide the reform of tax and employment law to better enable policy to meet its underlying objectives.

A replication of ‘Entry regulation and entrepreneurship: a natural experiment in German craftsmanship’

Rostam-Afschar (Empir Econ 47:1067–1101, 2014) analyzes the impact of the deregulation of the German Trade and Crafts Code of 2004 on entrepreneurial activity, using German microcensus (MC) data. He finds a uniform positive effect on market entry in partially and fully deregulated trades and no change in exit probabilities. We replicate and extend this study. Most importantly, we generate a novel classification scheme that aims to achieve an improved identification of crafts trades in the microcensus. It is necessary to remove non-craftsmen from the analysis as the policy change exclusively pertains to the crafts sector. In contrast to Rostam-Afschar’s findings, the increase in self-employment and entry is more pronounced in the completely deregulated B1-trades rather than the partially deregulated A-trades. In addition, exit probabilities in fully deregulated trades do not remain constant but rather increase.

The Labor Market Effects of Credit Market Information

We exploit a natural experiment to provide one of the first measurements of the causal effect of negative credit information on employment and earnings. We estimate that one additional year of negative credit information reduces employment by 3 percentage points and wage earnings by ${\$}$1,000. In comparison, the decrease in credit is only one-fourth as large. Negative credit information also causes an increase in self-employment and a decrease in mobility. Further evidence suggests this cost of default is inefficiently borne by those most creditworthy among previous defaulters. Received April 5, 2017; editorial decision September 2, 2017 by Editor Andrew Karolyi. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web Site next to the link to the final published paper online.

Empowering Women Under Social Constraints: Evidence from a Field Intervention in Rural Egypt

Women in the MENA region are economically and socially disempowered. High youth unemployment rates together with discriminatory social norms drive them to limit their investment in human capital. We evaluate a large-scale intervention attempting to relax human capital constraints for women by offering vocational, business and life skills training in 30 villages in rural Egypt. Relative to women in the control villages, the intervention increased the likelihood of treated women engaging in income-generating activities, driven by an increase in self-employment. Treated women also became more likely to have future business aspirations. However, their intra-household decision-making and gender equality attitudes were not affected by the intervention. We show that these results mask heterogeneous effects in terms of background characteristics and initial levels of social empowerment. We find no evidence of positive spillover effects for the program within treated villages and, more importantly, no evidence of different pre-trends in employment between the treated and control groups prior to the intervention.

The Effect of R&D Growth on Employment and Self-Employment in Local Labour Markets

The paper investigates the effects of firms’ investment in Research and Development (R&D) on employment dynamics in the British local labour markets (Travel to Work Areas). We distinguish between local areas characterised by the initial level of routinised employment of the workforce. We implement a instrumenting strategy to address endogeneity issues in the relation between innovation and employment. Our results suggest that increases in R&D investments mainly affect routinised areas, where the employment created is low skilled, concentrated in non-tradable sectors (like transport, construction) and services. A significant share of the jobs created is self-employment, concentrated in the 25-34 age cohort. We qualify the effect of R&D on self-employment by looking at local firms’ dynamics, which suggest that the increase in self-employment is reflected in a higher number of micro-firms. Rather, in non-routinized areas, R&D results in the expected increase in the demand of high-skilled workers and a reduced demand of low-skill employment.

Solo self-employment and membership of interest organizations in the Netherlands: Economic, social, and political determinants

Falling in-between the category of employers and employees, solo self-employed persons are poorly accommodated by the traditional system of corporatist interest representation through which the interests of employers are represented in employers’ associations, and the interests of employees are represented by trade unions. For business associations ‘micro businesses’ with no employees are difficult to reach and serve, as their interests are considered distinct from companies with employees. Trade unions in many countries even resisted the emergence of solo self-employment, fearing that these and other flexible arrangements would undermine not only secure working conditions but also union solidarity. This study examines differences in membership of interest organizations among solo self-employed workers. Various types of organizations are investigated, not only trade unions and business associations, but also new freelancer associations. Theoretically, three categories of determinants are examined to explain differences in membership: economic explanations, social explanations, and political explanations. Empirically, survey data are used from the Netherlands, a country with an increase in self-employment and a diverse supply of interest organizations. It is concluded that economic determinants explain both ‘generic’ membership (of any organization), as well as membership of specific organizations. Social and political determinants do not explain generic membership, but instead help to explain why some self-employed workers join particular types of organizations.

Entrepreneurship Education and Entry into Self-Employment Among University Graduates

Summary Entrepreneurship education has the potential to enable youth to gain skills and create their own jobs. In Tunisia, a curricular reform created an entrepreneurship track providing business training and coaching to help university students prepare a business plan. We rely on randomized assignment of the entrepreneurship track to identify impacts on students’ labor market outcomes one year after graduation. The entrepreneurship track led to a small increase in self-employment, but overall employment rates remained unchanged. Although business skills improved, effects on personality and entrepreneurial traits were mixed. The program nevertheless increased graduates’ aspirations toward the future.

The Labor Market Effects of Credit Market Information

Credit information affects the allocation of consumer credit, but its effects on other markets that are relevant for academic and policy analysis are unknown. This paper measures the effect of negative credit information on the employment and earnings of Swedish individuals at the margins of the formal credit and labor markets. We exploit a policy change that generates quasi-exogenous variation in the retention time of past delinquencies on credit reports and estimate that one additional year of negative credit information causes a reduction in wage earnings of $1,000. In comparison, the decrease in credit is only one-fourth as large. Negative credit information also causes an increase in self-employment and a decrease in mobility. We exploit differences in the information available to employers and banks to show suggestive evidence that this cost of default is borne inefficiently by the relatively more creditworthy individuals among previous defaulters.

Why did self-employment increase so strongly in Germany?

Germany experienced a unique rise in the level of self-employment in the first two decades following unification. Applying the nonlinear Blinder–Oaxaca decomposition technique, we find that the main factors driving these changes in the overall level of self-employment are demographic developments, the shift towards service sector employment and a larger share of population holding a tertiary degree. While these factors explain most of the development in self-employment with employees and the overall level of self-employment in West Germany, their explanatory power is much lower for the stronger increase in solo self-employment and in self-employment in former socialist East Germany.

Entrepreneurship and unemployment in Spain: a regional analysis

Self-employment is usually associated with entrepreneurship and it is often promoted as a way of reducing unemployment. Our aim in this article is to analyse the relationship between self-employment and unemployment taking into account its spatial dimension. The entrepreneur activity in each region depends not only on its own endowment but the entrepreneurship environment may be exerted some influence. Regional Spanish data are used to obtain evidence about this relationship using a Spatial Durbin model to embed the spatial dimension. The results reveal that both the direct and indirect effects are relatively small. Further, if unemployment increases in a region, self-employment decreases. However, if unemployment grows in neighbouring regions, incentives for entering self-employment increase, implying that there is a ‘refugee’ effect (self-employment as an answer to the lack of wage employment).

Why Did Self-Employment Increase so Strongly in Germany?

Germany experienced a unique rise in the level of self-employment in the first two decades following unification. Applying the non-linear Blinder-Oaxaca decomposition technique, we find that the main factors driving these changes in the overall level of self-employment are demographic developments, the shift towards service sector employment, and a larger share of population holding a tertiary degree. While these factors explain most of the development in self-employment with employees and the overall level of self-employment in West Germany, their explanatory power is much lower for the stronger increase of solo self-employment and of self-employment in former socialist East Germany.

Why Did Self-Employment Increase so Strongly in Germany?

Germany experienced a unique rise in the level of self-employment in the first two decades following unification. Applying the non-linear Blinder-Oaxaca decomposition technique, we find that the main factors driving these changes in the overall level of self-employment are demographic developments, the shift towards service sector employment, and a larger share of population holding a tertiary degree. While these factors explain most of the development in self-employment with employees and the overall level of self-employment in West Germany, their explanatory power is much lower for the stronger increase of solo self-employment and of self-employment in former socialist East Germany.

DOES SELF-EMPLOYMENT ENHANCE REGIONAL ECONOMIC DEVELOPMENT

Creative and qualified self-employed individuals contribute to economic growth by inventing new products, production processes, distribution methods and employing other people. Researchers are interested in self-employment if it can provide jobs to the unemployed population and also for those who face job discrimination. However, increase in self-employment is uncertain because entrepreneurial skills are assumed to be risky and self-employed workers can learn their skills gradually after starting their businesses. Economists pay special attention to finding the conceptual relationship between entrepreneurship as self-employment and economic development. Furthermore, studies show that the process of entrepreneurship has significant spatial autocorrelation and affects neighboring counties. Thus, the objective of this study is to identify and estimate the spatial impacts of self-employment in the economic development of the northeastern United States. The study expects to provide policy makers with vital information for policy measures designed for economic development. The study uses the Spatial Durbin Model (SDM) to estimate the relationship of employment, population and per capita income against self-employment. The results indicate that employment and population are positively linked to self-employment. Also, results highlight the positive contribution of self-employment on rural economic development.

The Affordable Care Act: Improving Incentives for Entrepreneurship and Self-Employment

Research evidence of pre-reform job lock and empirical research demonstrating a significant increase in self-employment under health care reforms or availability of Medicare benefits, strongly suggests that self-employment will increase as a consequence of full implementation of the Affordable Care Act (ACA). Taking into account the most recent findings in the economic literature on this topic, we make a rough estimate that the number of self-employed people will be 1.5 million higher under the ACA than it would otherwise have been. Relative increases in self-employment will vary across states as a function of pre-ACA market reforms already in place.

Access to Water, Time Allocation and Income in Rural India

In this paper we show that investments to improve the supply and management of water reduce the time spent in fetching water by both men and women, which in turn will lead to a reallocation of the time saved to productive activities, and result in increased incomes. Using the national ARIS/REDS panel data of the NCAER we show that political reservations in the local government for vulnerable groups like scheduled castes and tribes, and women lead to greater local government investments in water supply and improved management. Political reservations are shown to increase the time spent by women in all productive activities, especially in self-employment in farm and non-farm activities. Increases in self-employment are shown to have the greatest impact among the productive activities on household incomes.

Where Are the Ugandan Youth? Socio-Economic Characteristics and Implications for Youth Employment in Uganda

This paper undertook a structural analysis of the youth labor force in Uganda by documenting their location in the Ugandan economy by residence, region, sector, and employment status. The data were obtained from the Uganda National Household Surveys 2002/03, 2005/06 and 2009/10. We find that the youth population structure of the country poses a big challenge in an effort to create employment, particular for the youth. The majority of the youth labor force is located in the rural compared to the urban areas of the country. Whereas we find quite impressive labor force participation rates and the employment population ratio, they do not necessarily reflect more and better employment opportunities because of the high degree of informality where most of the youth are underemployed. Over 90% of the youth were employed in the informal sector outside agriculture with slightly more female youth than their male counterparts. The quality of the youth labor in terms of education is improving though will lower attainment rates at postsecondary level, however, the quality of the youth labor force is higher in urban than in rural areas. An increase in self-employment is observed which is an indication of high rate of job creation is in the informal economy. Consequently, there is a limited participation of the youth in professional and technical occupations and in paid employment. By gender, it’s surprising to observe that there more female youth employed as professionals compared to their male counterparts. However, it is noteworthy that the percentage of both male and female youth employed as professionals is on average less than 1%. Connected to this is the finding that there is a higher proportion of the youth labor force employed in agriculture despite its dismal contribution to GDP. Whereas the country experienced sectoral shifts in GDP composition, with the services and manufacturing sector becoming more important than agriculture, there are no sectoral shifts in employment with agriculture remaining the main employer of the youth labor force. Very low youth unemployment rates are observed suggesting a significant time underemployment. Additionally, there is a significant proportion of the youth that are skill underemployed; their educational attainment was higher than the educational level required by their current main jobs. Youth unemployment problem is more of an urban phenomenon with a higher proportion of the youth unemployed in Kampala compared to other regions. Our findings suggest that increasing labor productivity in agricultural as well as in the non-agricultural informal sector where the majority of the youth are located might help to solve the youth unemployment and underemployment predicaments. There is also need to ensure access to cheap finance by the youth, practical education, secure premises for informal businesses, and design policies to slow down the current population growth rates.

Employment and Membership Trends in the American Music Therapy Association, 1998–2009

Literature ReviewEmployment trend analyses can have implications and consequences for professions and fields of study (Brown, 1995). Researchers have analyzed employment trends in the United States to determine geographic areas that are considered locations of growth (Gordon, Richardson, & Yu, 1998). Other researchers conducting employment trend analyses have found differences in reasons for increases in self-employment between women and men in Canada (Kuhn & Schuetze, 2003). Professionals have initiated related studies to identify trends in healthcare and spending (Levit et al., 2003), determine hospital employment trends (Anderson & Kohn, 1996), and predict that the United States is likely to experience a shortage of physician specialists in the (Cooper, Getzen, McKee, & Laud, 2002). Academics and educators can apply the results of these studies to influence training at the university level (Sorensen, 1995). These studies are also valuable as researchers, clinicians, and administrators can utilize data to predict trends, allocate funding, change or modify academic curricula, determine areas of strengths and weaknesses, and identify areas for additional systematic inquiry. Although results could potentially be valuable to better identify trends in music therapy employment, to date, researchers have not conducted an analysis of employment trends specific to music therapy.Music therapy researchers have investigated employmentrelated areas, such as career longevity. Concerning music therapy career longevity, Decuir and Vega (2010) surveyed 231 music therapists with over 10 years of clinical experience. Results indicated participants did not perceive the professional competencies differently over time and the authors found an increase in longevity over time. Other researchers found that music therapists with graduate degrees remained in the field significantly longer than those with undergraduate degrees (Cohen & Behrens, 2002). Vega (2003) identified a number of factors contributing to music therapists remaining in the profession via interview methodology. These factors included initiating a new music therapy program, observing positive client changes, and conducting presentations. Vega also found that mentoring students and entry-level professionals contributed to a sense of inspiration and renewed enthusiasm.Specific to music therapy employment, Groene (2003) studied the workforce needs for music therapists and found an intense need for additional music therapists in the workforce both presently and in the future (p. 4). Groene found that there would be increased needs for music therapists working with persons who are elderly, children in public schools, and children diagnosed with autism. Concerning locations for music therapists to live and work, Decuir and Vega (2010) found that urban areas had more opportunities for music therapy employment than rural areas. As self-employment and private practice continues to grow, researchers have studied and written about this area in music therapy private practice (Silverman & Hairston, 2005; Wilhelm, 2004). Wilhelm (2004) studied financial issues and marketing skills relevant for music therapists in private practice. Additionally, Wilhelm found that most music therapists in private practice served children with developmental disabilities and older adults. Similarly, Silverman and Hairston (2005) found that most music therapists in private practice serve children with developmental disabilities, children in a special education setting, and residents in nursing homes.One of the unique aspects of music therapy as a profession is the diversity of client populations and clinical work settings. Although the field began in Veteran's hospitals (Davis & Gfeller, 2008), it has expanded and is still being utilized in innovative ways with an expanding base of clinical populations. However, to date, no published study has systematically evaluated music therapy employment trends. …

DID REFORM OF THE NON‐GROUP HEALTH INSURANCE MARKET AFFECT THE DECISION TO BE SELF‐EMPLOYED? EVIDENCE FROM STATE REFORMS IN THE 1990s

This paper estimates whether state-level implementation of community rating and guaranteed issue regulations in the non-group health insurance market during the 1990s affected the decision of taxpayers to be self-employed. Using a panel of tax returns that span 1987-2000, we find no statistically significant effect of the reforms on the propensity to be self-employed overall, although we find evidence of an increase in self-employment among older taxpayers and weaker evidence of decreases among younger cohorts.

The Costs of Involuntary Job Loss: Impacts on Workers’ Employment and Earnings

This paper examines the incidence of involuntary job loss and its impact on the employment and earnings of affected workers, using data from the Survey of Families, Incomes and Employment (SoFIE) for the 2002-09 period. It focusses on employees who had been working in their job for at least one year before the job loss. The impact of displacement on employment and earnings was estimated by using a propensity score-matching approach to select similar non-displaced workers and then compare their outcomes. We find that the employment rate of displaced workers was on average 27 percentage points lower 0-1 years after displacement, 14 percentage points lower 1-2 years after, and 8 percentage points lower 2-3 years after, than that of the matched comparison group. The average wage of re-employed displaced workers was 12 percent lower 0-1 years after displacement, 11 percent lower 1-2 years after and 7 percent lower 2-3 years after. Other impacts included increases in unemployment and self-employment, reductions in average weekly hours, and reductions in weekly and annual earnings.

Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate

Abstract Is the difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Act’s dependent coverage mandate, which allowed many 19-25 year-olds to acquire health insurance independently of their employment. A naive difference-in-difference strategy finds that the dependent coverage mandate led to a substantial increase in self-employment among young adults. However, a closer examination of the proper control group together with placebo tests reveals that the naive estimate is not robust, and that the mandate did not truly increase self-employment. This suggests that lack of health insurance and “entrepreneurship lock” have not been major barriers to self-employment for young adults.