Nobody's business but my own: Self-employment and small enterprise in economic development

Douglas Gollin ()

Journal of Monetary Economics, 2008, vol. 55, issue 2, 219-233

Abstract: In most poor countries, small firms and self-employment are the dominant forms of business enterprise--even in the manufacturing sector. For rich countries, in contrast, self-employed people account for very small shares of manufacturing employment and output. This paper builds on Lucas [1978. On the size distribution of business firms. Bell Journal of Economics 9(2), 508-523] to ask whether structural changes of this kind are driven by productivity differences. A model, calibrated to Japanese time-series data, is shown to mimic key features of cross-country and time-series data. The results support the idea that changes in aggregate productivity account for much of the cross-country variation in establishment size and self-employment rates.

Date: 2008
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Citations: View citations in EconPapers (163)

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Working Paper: Nobody's Business but My Own: Self Employment and Small Enterprise in Economic Development (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:2:p:219-233

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