| Abstract: | An econometric model of the self employment decision is estimated for a large sample of UK graduates. Although the earnings distributions suggest that there are incentives to be self employed, the difference in the predicted earnings that an individual receives in the self employed and employed sectors is not a significant influence on the choice of sector and the decision depends on personal and social factors. Policies based on changing the pecuniary returns may not encourage the growth of self employment among graduates. The econometric results also suggest that the self employed are a non-random subset of the graduate workforce., revision accepted August 1989 |
