Entrepreneurship and Income Inequality

Daniel Halvarsson (), Martin Korpi () and Karl Wennberg ()
Additional contact information
Daniel Halvarsson: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/daniel-halvarsson/
Martin Korpi: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/martin-korpi/

No 281, Ratio Working Papers from The Ratio Institute

Abstract: Entrepreneurship research highlights individual entrepreneurship as a simultaneous source of enhanced income mobility for some but a potential source of poverty for others. Research on inequality has furthered new types of models to decompose and problematize various sources of income inequality in modern economies, but attention to entrepreneurship as an increasingly prevalent occupational choice in these models remains scant. This paper seeks to bridge these two literatures by applying regression-based income decomposition among entrepreneurs and paid workers, distinguishing between self-employed (SE) and incorporated self-employed (ISE) individuals in Sweden. We find that the proportion of self-employed in the workforce significantly increases income dispersion by way of widening the bottom end of the distribution, whereas the proportion of incorporated self-employed contributes only marginally to income dispersion at the top end of the distribution.

Keywords: entrepreneurship; income decomposition (search for similar items in EconPapers)
JEL-codes: J24 J31 L26 O15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-12-15
New Economics Papers: this item is included in nep-ent and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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