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  5. The Formal Sector Wage Premium and Firm Size for Self-employed Workers
 
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The Formal Sector Wage Premium and Firm Size for Self-employed Workers

Author(s)
Bargain, Olivier  
Badaoui, Eliane  
Kwenda, Prudence  
Strobl, Eric  
Walsh, Frank  
Uri
http://hdl.handle.net/10197/5133
Date Issued
2013-10
Date Available
2013-12-09T11:28:05Z
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.
Sponsorship
Not applicable
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP13/17
Subjects

Self-employment

Managerial ability

Informal sector

Web versions
http://www.ucd.ie/t4cms/WP13_17.pdf
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
https://creativecommons.org/licenses/by-nc-nd/3.0/ie/
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WP13_17.pdf

Size

345.95 KB

Format

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Owning collection
Economics Working Papers & Policy Papers

Item descriptive metadata is released under a CC-0 (public domain) license: https://creativecommons.org/public-domain/cc0/.
All other content is subject to copyright.

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