Self-Employment Rents : Evidence from Job Satisfaction Scores

Previous studies have pointed to the existence of barriers at the entry of self-employed sectors, such as liquidity constraints. In many countries, policies are directed toward removing these barriers in order to promote entrepreneurial activity. This paper examines whether such barriers exist by examining the amount of rent enjoyed by self-employed workers; if there are no barriers between the self-employed sector and the salary/wage sector, self-employed workers should not enjoy rents. Examination of the rent associated with self-employment, however, cannot simply be accomplished by comparing the incomes of self-employed and salary/wage workers. This is because self-employed workers may enjoy higher utility due to their work environment, with such benefits as autonomy and flexibility of work schedules. To overcome the difficulty of measuring self-employment rents, I use self-reported job satisfaction from the National Longitudinal Survey of Youth 79 (NLSY79) to capture workers' overall satisfaction with their jobs. The results robustly indicate that self-employed workers are more satisfied with their jobs than salary/wage workers, even after allowing for the time-invariant individual heterogeneity in their reported job satisfaction. This result suggests that there are barriers at the entry into self-employment and that self-employed workers enjoy rents.Self-Employmen, Job Satisfaction

Male-Female Wage and Productivity Differentials: A Structural Approach Using Japanese Firm-Level Panel Data

In an attempt to explain male-female wage differential, I estimated the relative marginal productivity and relative wage of female workers compared to those of male workers using panel data of Japanese firms. The relative wage of female workers is also estimated from the same data. Cross-sectional estimates that neglect firm-level, fixed effects indicate that the marginal productivity of female workers is 44 percent of that of male workers, while female wage is 31 percent of that of male workers. These estimates indicate that part of the wage differential cannot be explained by the productivity differential. However, the IV estimates that allow for firm-level, fixed effects indicate that both female marginal productivity and wage are about 50 percent of those of male workers. Thus we cannot reject the null hypothesis of no discrimination against female workers once the selection of workers into productive and high paying firms is accounted for. Evidence found in this study is consistent with the existence of employer sex discrimination at the point of job entry, but not afterward.Sex Discrimination, Wage, Productivity, Panel Data

Compensating Wage Differentials among Self-Employed Workers:Evidence from Job Satisfaction Scores,

Previous studies have found that self-employed workers with long business tenure earn less than other workers with similar characteristics. This difference in earnings can be explained by the compensating wage differential theory when self-employed jobs have attractive non-earnings aspects. Using the National Longitudinal Survey of Youth 79 (NLSY79), I test whether moves in and out of self-employment are associated with changes in recorded job satisfaction scores. By looking at changes in individualsf job satisfaction over time, I overcome the difficulty of interpreting differences in subjective job satisfaction scores across individuals associated with cross-sectional analysis. Using my estimates, I calculate the monetary value of the non-pecuniary aspects of self-employment and find that the value of self-employment in terms of job satisfaction is sufficiently high enough to support the compensating differential hypothesis as an explanation for lower earnings among self-employed workers.

Attrition Bias in Economic Relationships Estimated with Matched CPS Files

Short panel data sets constructed by matching individuals across monthly files of the Current Population Survey (CPS) have been used to study a wide range of questions in labor economics. Such panels offer unique advantages. But because the CPS makes no effort to follow movers, these panels exhibit significant attrition, which may lead to bias in longitudinal estimates using matched CPS files. Because the Survey of Income and Program Participation (SIPP) uses essentially the same sampling frame and design as the CPS, but makes substantial efforts to follow individuals that move, we use the SIPP to construct 'data-based' rather than 'model-based' corrections for bias from selective attrition. The approach is applied to a couple of standard economic relationships that have been studied with the CPS specifically union wage differentials and the male marriage wage premium. The results for the longitudinal analysis of union wage effects reveal negligible and statistically insignificant evidence of attrition bias. In contrast, the longitudinal analysis of the marriage premium for males finds statistically significant evidence of attrition bias, although the amount of bias does not seem to be serious in an economic sense. We regard the evidence as suggesting that in many applications the advantages of using matched CPS panels to obtain longitudinal estimates are likely to far outweigh the disadvantages from attrition biases, although we should allow for the possibility that attrition bias leads the longitudinal estimates to be understated.

Labor-Market Attachment and Training Participation

This paper examines how expected attachment to the labor market and expected tenure at a specific firm affect training participation. The results, based on cross-sectional data from Japan, indicate that expected attachment to the labor market affects participation in both employer- and worker-initiated training, while expected tenure at a specific firm mainly explains participation in employer-initiated training. These two attachment indices explain almost half of the gender gap in training participation. Employers in a less competitive labor market are more likely to offer employer-initiated training to their workers.

Working Mothers and Sons' Preferences Regarding Female Labor: Direct Evidence From Stated Preferences

The labor force participation rate of women in Japan has increased in recent decades. To shed light on the mechanism behind this increase, we focus on the explanation that Fernandez, Fogli and Olivetti (QJE (2004)) suggest. They claim that men who are raised by working mothers form a preference that is favorable toward working women and, consequently, they are more likely to have working wives. We test this hypothesis using the Japanese General Social Survey 2000-2002, which consists of repeated cross-sectional data sets. We fail to find a positive correlation between men's mothers' full-time work status and their wives' full-time work status. However, the lack of a correlation may be due to confounding factors. To take these potentially confounding factors into account, we directly examine whether the men raised by working and non-working mothers respond differently to the opinion survey's questions regarding the division of gender roles. The estimation results indicate that men raised by full-time working mothers are less likely to support the idea of the division of gender roles. Those men are also less likely to believe in the negative impact of a mother's working on her children's development. We confirm that the responses to the opinion survey are correlated with wives' labor force status

The efficient moment estimation of the probit model with an endogenous continuous regressor

We propose an efficient moment estimator for the probit model with a continuous endogenous regressor. The estimation can be readily implemented using a standard statistical package that can estimate a non-linear system two-stage least squares (instrumental variable) estimator.Probit, Continuous endogenous regressor, Moment estimation