A labour economics analysis of self-employment
This thesis examines self-employment from a labour economics perspective. Thus far the self-employment literature is relatively modest, and the analysis presented here attempts to fill some of the gaps that remain. This objective is met in the following ways. First, issues hardly addressed by the economics professions are examined in detail: self-employment job satisfaction is an example of this. Second, the two datasets used are both British, whereas most existing studies use US data: this permits us to examine whether the results obtained for these US studies are generally applicable, or are the consequence of idiosyncrasies in the US labour market. Third, there is replication for the self-employed of models frequently adopted for analyses of the wage and salary sector; these replication analyses permit us to see if they are applicable to the self-employed; the analysis of the human capital earnings model is an example of this. Fourth the analyses have been undertaken in a framework more consistent with the issues identified in the literature as relevant to the self-employed. With this general framework in place, three particular issues were examined in depth. First, the employment status decision. Second, the determination of job satisfaction in self-employment. Third, the determination of earnings in self-employment. Each analysis provided a number of interesting insights; a formal compensating differences framework in the analysis of the employment status decision showed the trade-off accepted when switching between self-employment and wage and salary work, the analysis of self-employment job satisfaction showed the importance of treating job satisfaction as a measure comparing current circumstances with a benchmark, while the analysis of self-employment earnings showed the insufficiency of the human capital model for examining self-employment earnings. In these and other ways this thesis adds to the self-employment literature.