| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5060300 | Economics Letters | 2011 | 4 Pages |
Previous studies distinguish between “survival” and “aspirations” based on ex ante declarations. In this paper, we propose an identification strategy based on objective criteria. Using evidence from a standard labour force survey, we find that self-employed who switched from wage employment and created additional jobs were systematically over-compensated relative to those who did not switch and to those who switched but have not created additional jobs.
⺠We analyse switching from employment to self-employment. ⺠Fitted wages and residuals are used to infer the “productivity” and overcompensations. ⺠Residuals for the switchers do not differ statistically from non-switchers. ⺠Switchers, who create new jobs have lower fitted wages but positive residuals. ⺠Such results suggest overcompensation in the case of switchers who create jobs.
