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Switching Models with Self-Selection: Self-Employment in Hungary

Author

Listed:
  • Ira N. Gang

    (Rutgers University)

  • Catherine Y. Co

    (University of Central Florida)

  • Myeong-Su Yun

    (University of Western Ontario)

Abstract

We estimate the determinants of earnings for both the self-employed and wage/salary sectors in an economy undergoing transition from socialism to greater market orientation. We adopt a (full information) MLE methodology in addition to Heckman's two-step method, while taking both participation and self-employment decisions into account. We use the Hungarian Household Panel Survey for 1994. We find that the return to characteristics are not significantly different between self-employed and wage/salary sectors. However, when we also account for the dispersion of earnings, the structure of the earnings between the self- and wage/salary employed are different

Suggested Citation

  • Ira N. Gang & Catherine Y. Co & Myeong-Su Yun, 1999. "Switching Models with Self-Selection: Self-Employment in Hungary," Departmental Working Papers 199912, Rutgers University, Department of Economics.
    • Handle: RePEc:rut:rutres:199912
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    References listed on IDEAS

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    Cited by:

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    2. Axel Heitmueller, 2006. "Public-private sector pay differentials in a devolved Scotland," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 295-323, November.
    3. Heitmueller, Axel, 2004. "Public-Private Sector Wage Differentials in Scotland: An Endogenous Switching Model," IZA Discussion Papers 992, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    decomposition; self-employment; self-selection; switching; transition;
    All these keywords.

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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