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Self-employment as a source of income inequality

Stefan Schneck

Eurasian Business Review, 2020, vol. 10, issue 1, No 3, 45-64

Abstract: Abstract It is well known that the self-employed are over-represented at the bottom as well as the top of the income distribution. This paper shifts the focus from the income situation of the self-employed to the distributive effects of a change in self-employment rates. With representative German data and unconditional quantile regression analysis we show that an increase in the proportion of self-employed individuals in the labor force increases income polarization by tearing down floors at the bottom and allowing higher income potentials at the very top of the hourly income distribution. Recentered influence function regression of inequality measures corroborate that self-employment is a source of income inequality in the labor market.

Keywords: Income distribution; Income inequality; Income polarization; Self-employment (search for similar items in EconPapers)
JEL-codes: D31 L26 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s40821-019-00143-8

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