Marital Status, Child Rearing and Earnings Differentials in the Graduate Labour Market

Who skims the cream of the Italian graduate crop? Wage employment versus self-employment

“…This means that earnings of those who choose wage employment are significantly lower than earnings they would have obtained as self-employed. Although the caution of Dolton and Makepeace (1987a) who show that no unambiguous interpretation can be placed on the sign of a sample selection term, this evidence may confirm our belief that individuals prefer a job entitled with full rights to social security to self-employed.…”

“…Rees and Shah (1986) and Dolton and Makepeace (1990) find no statistically significant role for the predicted earnings differential in the estimates of the self-employment decision. In contrast with these results, our data suggest that the earnings distribution provides incentives to be self-employed (for both males and females) in line with the findings of Fujii and Hawley (1991), Bernhardt (1994), Taylor (1996), Johansson (2000) and Georgellis and Wall (2005).…”

“…We investigate the effect of the educational performance on the choice between self-employment and paid-employment by means of the model of Rees and Shah (1986) and similar to the models estimated by Dolton and Makepeace (1990), Bernhardt (1994), Taylor (1996) and Johansson (2000). The motivation of the model, which is a standard selection model of the employment status decision, is that the self-employed have a comparative advantage of working in that sector.…”

“…Following Dolton and Makepeace (1990) and Johansson (2000) we drop from the structural probit equation the education level dummies of the individual, i.e. the dummy Qualification which assumes a value of 1 whether the graduate workers has attempted further qualifica-tion after graduation.…”

“…To our knowledge, ability as measured by degree performance has rarely been used in previous analyzes of self-employment. As far as we know, only Dolton and Makepeace (1990) consider degree class and A level score. They draw the conclusion that these variables have no significant role to play in their analysis.…”