Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300358 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
IFS Working Papers No. 24/01
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
I study the labor market risks associated with being self-employed. I document that the self-employed are subject to larger earnings fluctuations than employees and that they frequently transition into unemployment. Given the self-employed are not eligible to unemployment insurance, I analyze the provision of benefits targeted at these risks using a calibrated search model with (i) precautionary savings, (ii) work opportunities in paid- and self-employment, (iii) skill heterogeneity. This exercise suggests that extending the current US unemployment insurance scheme to the self-employed comes with a clear increase in the transition rate from self-employment to unemployment and an unequal benefits to contributions ratio across skill groups. At the calibrated parameters, the self-employed in the middle of the skill distribution lose welfare.
Subjects: 
Self-employed
Labor market
Risk
Unemployment
Unemployment insurance
Income
Welfare analysis
USA
JEL: 
D11
D12
D14
E21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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