<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>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.</p>
</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.

Business Income Dynamics and Labor Market Fluidity

IZA Journal of Labor Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Business Income Dynamics and Labor Market Fluidity"}

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...

Business Income Dynamics and Labor Market Fluidity

Data publikacji: 18 paź 2021

Zakres stron: -

Przyjęty: 26 kwi 2021

DOI: https://doi.org/10.2478/izajole-2021-0004

Słowa kluczowe
labor reallocation, employment dynamics, self-employment, business ownership

© 2021 Henry Hyatt et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Business Income Dynamics and Labor Market Fluidity

Data publikacji: 18 paź 2021

Zakres stron: -

Przyjęty: 26 kwi 2021

DOI: https://doi.org/10.2478/izajole-2021-0004

Słowa kluczowelabor reallocation, employment dynamics, self-employment, business ownership

© 2021 Henry Hyatt et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Słowa kluczowe
labor reallocation, employment dynamics, self-employment, business ownership