Authors
Anmol Bhandari, Tobey Kass, Thomas J. May, Ellen McGrattan, Evan Schulz
- Acknowledgements & Disclosure
- The authors thank Anne Parker and Barry Johnson for facilitating this project through the Joint Statistical Research Program of the Statistics of Income Division of the United States Internal Revenue Service. We acknowledge support from the National Science Foundation (Award #2214248). For their valuable feedback on earlier drafts, we thank discussants Peter Klenow and Ross Levine and seminar participants at the Office of Tax Analysis, Federal Reserves, Stanford, Harvard, Yale, Princeton, ASU, NYU, and Toronto and conference participants at NBER, SED, and Hoover Institution. McGrattan is an IRS employee without pay under an agreement made possible by the Intragovernmental Personnel Act of 1970 (5 U.S.C. 3371-3376). This research was conducted while Kass was an employee at the U.S. Department of the Treasury. Any findings, interpretations, opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views or political positions of the IRS, the U.S. Department of the Treasury, the NSF, or the NBER. All results have been reviewed to ensure that no confidential information is disclosed. All data work for this project involving confidential taxpayer information was done at IRS facilities, on IRS computers, by IRS and Department of the Treasury employees, and at no time was confidential taxpayer data ever outside of the IRS computing environment.
- DOI
- https://doi.org/10.3386/w32948
- Pages
- 57
- Published in
- United States of America
Table of Contents
- 1 Introduction 3
- 2 Data 5
- 2.1 Sample 6
- 2.2 Income Measures 6
- Definition 1. 7
- Definition 2. 8
- Definition 3. 8
- 2.3 Imputations for Skills and Education 11
- 2.3.1 Skills 11
- 2.3.2 Education 12
- E X β X 12
- E t X 12
- 2.4 Descriptive Statistics 12
- 3 Comparison to Current Population Survey 13
- 4 Life-cycle Earnings Profiles 19
- 4.1 Econometric Framework 19
- Condition 1. 19
- N g a t 20
- N N 20
- N N 20
- N N N N 20
- N N γ y β β β T g 21
- Condition 2. 21
- 4.2 Groups 21
- 4.3 Parameter Estimates 22
- Y a Y 24
- N N γ β . 24
- 4.4 Non-pecuniary Benefits of Entrepreneurship 26
- 4.5 Risk Factors in Entrepreneurship 29
- P P P P P 30
- 4.5.1 Idiosyncratic Risk 31
- V C δ C δ V 31
- P P P A y y µ σ σ g c 32
- . . . . 33
- 4.5.2 Aggregate Risk 33
- A B A a 33
- 5 Impediments to Entrepreneurship 34
- 5.1 Entry into Self-Employment 37
- . . 37
- 5.2 Financing 38
- E β β Owner p β Owner β Owner u β u β Z β Z p δ ϵ 40
- E i j t t Owner t p j t t u j t t Z δ β i β 40
- 5.3 Experience 41
- 5.4 Insurance 42
- 6 Conclusions 43
- References 45