Self-Employment Within the Firm

Vittorio Bassi, Jung Hyuk Lee, Alessandra Peter, Tommaso Porzio, Ritwika Sen and Esau Tugume

No 11900, CESifo Working Paper Series from CESifo

Abstract: We study the internal organization of manufacturing firms in Uganda. We measure what people do within firms and find limited specialization, far below what is feasible given the prevailing production process and average firm size of 5.7 workers. We build and estimate an occupational choice model in which firm size, productivity, and specialization arise endogenously. The model shows that firms in this setting are largely “self-employment in disguise” and generate just a 20% productivity gain over literal self-employment. In a counterfactual economy with full specialization, the same aggregate output can be produced with an average firm size of only 1.6.

JEL-codes: L23 L25 O11 O17 (search for similar items in EconPapers)
Date: 2025
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