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Differences in the earnings distribution of self- and dependent emploxed German men - evidence from a quantile regression decomposition analysis

Author

Listed:
  • Nils Braakmann

    (Institute of Economics, Leuphana University of Lüneburg)

Abstract

This paper uses data from the German Socio-Economic Panel of the years 2000 to 2005 to study the earnings differential between self- and dependent employed German men. Constructing a counterfactual earnings distribution for the self-employed German dependant employment and using quantile regression decompositions we find that the earnings differential over the distribution cannot be explained by differences in endowments. Furthermore, low-earning self-employed could earn more in dependent employment. Finally, the observed earnings advantage for the self-employed at the top of the earnings distribution os not associated with higher returns to observable variables.

Suggested Citation

  • Nils Braakmann, 2007. "Differences in the earnings distribution of self- and dependent emploxed German men - evidence from a quantile regression decomposition analysis," Working Paper Series in Economics 55, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:55
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    References listed on IDEAS

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    5. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    6. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
    7. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-234, July-Sept.
    8. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    9. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-266, May.
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    11. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, October.
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    13. Martin T. Robson, 1997. "The Relative Earnings from Self and Paid Employment: A Time‐series Analysis for the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(5), pages 502-518, November.
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    Citations

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    Cited by:

    1. Lechmann, Daniel S. J., 2013. "Can working conditions explain the return-to-entrepreneurship puzzle?," Discussion Papers 86, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    2. Lechmann, Daniel S. J., 2015. "Can working conditions explain the return-to-entrepreneurship puzzle?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 48(4), pages 271-286.
    3. Christian Hopp & Johannes Martin, 2017. "Does entrepreneurship pay for women and immigrants? A 30 year assessment of the socio-economic impact of entrepreneurial activity in Germany," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(5-6), pages 517-543, May.
    4. Daniel S. J. Lechmann, 2015. "Can working conditions explain the return-to-entrepreneurship puzzle? [Können Arbeitsbedingungen das „return-to-entrepreneurship puzzle“ erklären?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(4), pages 271-286, December.

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    More about this item

    Keywords

    self-employment; earnings differential; quantile regression decomposition; Machado/Mata decomposition;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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