Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96255
Authors: 
Bargain, Olivier
El Badaoui, Eliane
Kwenda, Prudence
Strobl, Eric
Walsh, Frank
Year of Publication: 
2013
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 13/17
Abstract: 
We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers' managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in self-employment only when they cannot find a salaried job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model is used for illustration as a special case of our more general framework. Empirical evidence from Mexico is provided and demonstrates that firm size wage effects for employees and selfemployed workers are broadly consistent with the model.
Subjects: 
Self-employment
Managerial ability
Informal sector
JEL: 
J31
O17
Document Type: 
Working Paper

Files in This Item:
File
Size
345.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.