Business Ownership versus Self†Employment

Using data from the 1979 National Longitudinal Survey of Youth (NLSY79), we find that 68 percent of jobs classified as self†employment are not independently reported as self†owned businesses, while 16 percent of self†owned businesses are not independently classified as self†employment. Businesses not regarded as self†employment are often associated with such signs of entrepreneurship as self†identification as an entrepreneur, job descriptions that refer to business ownership or a managerial role, and high individual skill/asset levels. Self†employed jobs that are not independently classified as self†owned businesses are dominated by contract work and home†based, single†person pursuits. Our evidence suggests that self†employment should not be viewed as a synonym for business ownership.