Wage uncertainty and the labour supply of self-employed workers

S C Parker, Y Belghitar, T Barmby

Research output: Contribution to journalArticle

44 Citations (Scopus)

Abstract

We analyse the effects of wage uncertainty on the labour supply of self-employed workers, using PSID data on self-employed American males. The standard deviation of past wages, as a measure of wage uncertainty, is the key determinant of male self-employed labour supply, with a significant positive effect. In contrast there is no effect from the (instrumented) wage or other explanatory variables. Our findings are consistent with the self-employed 'self-insuring' in response to greater uncertainty by working longer hours, and they can also help explain why self-employed Americans work longer average hours for lower average wages than their employee counterparts.

Original languageEnglish
Pages (from-to)C190-C207
Number of pages18
JournalEconomic Journal
Volume115
Issue number502
DOIs
Publication statusPublished - Mar 2005

Fingerprint

Uncertainty
Labor supply
Self employed workers
Wages
Standard deviation
Employees

Keywords

  • risk
  • behavior
  • entrepreneurship
  • dentists
  • entry

Cite this

Wage uncertainty and the labour supply of self-employed workers. / Parker, S C ; Belghitar, Y ; Barmby, T .

In: Economic Journal, Vol. 115, No. 502, 03.2005, p. C190-C207.

Research output: Contribution to journalArticle

Parker, S C ; Belghitar, Y ; Barmby, T . / Wage uncertainty and the labour supply of self-employed workers. In: Economic Journal. 2005 ; Vol. 115, No. 502. pp. C190-C207.
@article{1046817753254da7ab6eb8dffd2c1cf9,
title = "Wage uncertainty and the labour supply of self-employed workers",
abstract = "We analyse the effects of wage uncertainty on the labour supply of self-employed workers, using PSID data on self-employed American males. The standard deviation of past wages, as a measure of wage uncertainty, is the key determinant of male self-employed labour supply, with a significant positive effect. In contrast there is no effect from the (instrumented) wage or other explanatory variables. Our findings are consistent with the self-employed 'self-insuring' in response to greater uncertainty by working longer hours, and they can also help explain why self-employed Americans work longer average hours for lower average wages than their employee counterparts.",
keywords = "risk, behavior, entrepreneurship, dentists, entry",
author = "Parker, {S C} and Y Belghitar and T Barmby",
year = "2005",
month = "3",
doi = "10.1111/j.0013-0133.2005.00987.x",
language = "English",
volume = "115",
pages = "C190--C207",
journal = "Economic Journal",
issn = "0013-0133",
publisher = "Wiley-Blackwell",
number = "502",

}

TY - JOUR

T1 - Wage uncertainty and the labour supply of self-employed workers

AU - Parker, S C

AU - Belghitar, Y

AU - Barmby, T

PY - 2005/3

Y1 - 2005/3

N2 - We analyse the effects of wage uncertainty on the labour supply of self-employed workers, using PSID data on self-employed American males. The standard deviation of past wages, as a measure of wage uncertainty, is the key determinant of male self-employed labour supply, with a significant positive effect. In contrast there is no effect from the (instrumented) wage or other explanatory variables. Our findings are consistent with the self-employed 'self-insuring' in response to greater uncertainty by working longer hours, and they can also help explain why self-employed Americans work longer average hours for lower average wages than their employee counterparts.

AB - We analyse the effects of wage uncertainty on the labour supply of self-employed workers, using PSID data on self-employed American males. The standard deviation of past wages, as a measure of wage uncertainty, is the key determinant of male self-employed labour supply, with a significant positive effect. In contrast there is no effect from the (instrumented) wage or other explanatory variables. Our findings are consistent with the self-employed 'self-insuring' in response to greater uncertainty by working longer hours, and they can also help explain why self-employed Americans work longer average hours for lower average wages than their employee counterparts.

KW - risk

KW - behavior

KW - entrepreneurship

KW - dentists

KW - entry

U2 - 10.1111/j.0013-0133.2005.00987.x

DO - 10.1111/j.0013-0133.2005.00987.x

M3 - Article

VL - 115

SP - C190-C207

JO - Economic Journal

JF - Economic Journal

SN - 0013-0133

IS - 502

ER -