Self-employment, entrepreneurship, and the NLSY79: researchers have used the rich data from the 1979 cohort of the National Longitudinal Survey of Youth to investigate the relationship between self-employment and various job and earnings outcomes; future inquiry may afford valuable insights into other interesting consequences of self-employment

Monthly Labor Review, Feb, 2005 by Robert W. Fairlie

Table 1. Labor market transition matrices, National Longitudinal
Survey of Youth, 1979-2002

[In percent]

                                                      Wage and salary
Gender, category, and year t   Nonemployment, (1,2)   employment, (2)
                                   t   1/t   2          t   1/t   2

            Men

1979-94, year t:
  Nonemployment                        72.1                25.7
  Wage and salary employment            1.0                95.5
  Self-employment                       0.7                30.8

1994-2002, year t:
  Nonemployment                        65.6                 0.3
  Wage and salary employment            2.8                94.0
  Self-employment                       2.0                22.8

           Women

1979-94, year t.
  Nonemployment                        75.4                21.4
  Wage and salary employment            3.7                94.1
  Self-employment                       4.6                29.0

1994-2002, year t:
  Nonemployment                        68.7                28.1
  Wage and salary employment            6.1                91.5
  Self-employment                      10.2                28.6

                                    Self-        Share of
Gender, category, and year t   employment, (2)    total,      N
                                 t   1/t   2      year t

            Men

1979-94, year t:
  Nonemployment                       2.3           7.0      3,675
  Wage and salary employment          3.4          85.1     33,917
  Self-employment                    68.4           7.9      2,661

1994-2002, year t:
  Nonemployment                       5.3           6.9      1,284
  Wage and salary employment          3.1          83.6     11,249
  Self-employment                    75.1           9.5      1,112

           Women

1979-94, year t.
  Nonemployment                       3.3          19.1      9,584
  Wage and salary employment          2.2          76.1     31,452
  Self-employment                    66.5           4.8      1,641

1994-2002, year t:
  Nonemployment                       3.2           0.2      2,844
  Wage and salary employment          2.4           0.8     10,585
  Self-employment                    61.2           0.1        727

(1) Those unemployed and not in the labor force.

(2) Measured in year t   1 for 1979-94 and year t   2 for 1994-2002.

NOTE: The sample consists of youths aged 22 to 45 years who are not
enrolled in school. All estimates are calculated with the use of
annual sample weights provided by the National Longitudinal Survey
of Youth.

Notes

(1) See Center for Human Resource Research, NLSY79 Users' Guide (Columbus, OH, The Ohio State University, 1999), for a detailed description of the NLSY79.

(2) Estimates from the NLSY79 are comparable to those from 1990 census microdata using a similar age group. See Robert W. Fairlie, "Does Business Ownership Provide a Source of Upward Mobility for Blacks and Hispanics?" in Douglas Holtz-Eakin, ed., Entrepreneurship and Public Policy (Cambridge, MA, MIT Press, 2004), pp. 634-59. The census shows slightly lower rates, but the relative differences between the races are similar.