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The Effect of Self-Employment on Income Inequality

Stefan Schneck

No 999, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

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 earnings 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; earnings inequality; self-employment (search for similar items in EconPapers)
JEL-codes: L26 D31 (search for similar items in EconPapers)
Date: 2018
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http://www.diw.de/documents/publikationen/73/diw_01.c.611511.de/diw_sp0999.pdf (application/pdf)

Related works:
Working Paper: The Effect of Self-Employment on Income Inequality (2018) Downloads
Working Paper: The effect of self-employment on income inequality (2018) Downloads
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