Self-Employment and Low Wage, Less Skilled Men: Spitting Into the Wind?
Jun 01, 1996
Elaine Reardon

A recurring theme in the self-employment literature is that self-employment is an outlet for people who are misfits in the wage sector. A misfit could be a less-skilled worker who faces worsening prospects in the wage-sector, or a skilled worker who harbors a taste for self-employment that precludes him from trying to succeed as someone else's employee.

The analysis uses different techniques to examine the two misfit explanations. The results indicate that the second interpretation of misfit is the correct one and that this is usually obscured by the fact that less-skilled men change jobs frequently and one of the many things they try is self-employment.