Brown, Sarah, Farrell, Lisa and Harris, Mark N. (2010) Modeling the incidence of self-employment: individual and employment type heterogeneity. Contemporary Economic Policy, 29 (4). pp. 605-619. ISSN 10743529

Modeling the incidence of self-employment has traditionally proved problematic. Although the supply-side characteristics of the self-employed are well documented, we argue that the literature has neglected demand-side aspects. We explore the determinants of self-employment using the U.S. Survey of Consumer Finances. We present results from an econometric framework that allows us to model, separately and simultaneously, the influences of individual heterogeneity (i.e., supply-side factors) and employment type heterogeneity (i.e., demand-side factors) on the probability of self-employment. Our findings suggest that while individual characteristics are important determinants of self-employment, there are factors specific to the type of employment that influence self-employment.

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