Business Ownership vs. Self-Employment

Abstract

Using NLSY9 data, we find that 68% of jobs classified as self-employment are not independently reported as self-owned businesses, while 16% of self-owned businesses are not independently classified as self-employment. Businesses not regarded as self-employment are often associated with such signs of entrepreneurship as self-identification as an entrepreneur, job descriptions that refer to business ownership or a managerial role, and high individual skill/asset levels. Self-employed jobs that are not independently classified as self-owned businesses are dominated by contract work and home-based, single-person pursuits. Our evidence suggests that self-employment should not be viewed as a synonym for business ownership.