Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298393 
Year of Publication: 
2021
Citation: 
[Journal:] IZA Journal of Labor Economics [ISSN:] 2193-8997 [Volume:] 10 [Issue:] 1 [Article No.:] 4 [Year:] 2021 [Pages:] 1-51
Publisher: 
Sciendo, Warsaw
Abstract: 
The share of the U.S. population that receives business income has increased substantially in recent decades. At the same time, worker hire and separation rates declined, with worrying implications for productivity and wage growth. In this paper, we explore the relationship between business income (BI) receipt and labor reallocation. We show that BI recipients are largely excluded from existing measures of labor reallocation. Including BI recipients reduces the measured decline from 1994 to 2014 in the hire and separation rates by 8.3-8.7%, respectively, primarily among jobs that were secondary sources of income or short in duration. We present evidence that worker transitions between wage and salary jobs and BI represent labor reallocation, as opposed to reclassification of employees as independent contractors.
Subjects: 
labor reallocation
employment dynamics
self-employment
business ownership
JEL: 
J63
L26
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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