Small Business and Self-Employment as Income Mobility Mechanisms

摘要

This study extends the observation period for gauging income growth. Using the same National Longitudinal Survey of Youth (NLSY) surveys used in earlier studies, this study tracks employment and income experiences in a later phase of the typical work life. Whereas earlier studies focused on the first years of labor market entry for youths aged 14-22, this study focuses on those same workers a decade later. Specifically, this study focuses on young people aged 24-32 years at the beginning of the observation period (1989). We then track their work history over the subsequent 15 years (1989-2004). Our research goal was twofold. First we wanted to gauge the degree of relative income mobility over the 1989-2004 period. That is, we wanted to ascertain how often and to what degree individuals change intra-cohort income ranks in this age and time space. That would allow us to determine whether general mobility in the U.S. economy is changing over time. Our second goal was to isolate the role of small business exposure in the mobility process. Specifically, does small business experience either as owner or employee significantly affect the degree of income mobility. This study reaffirms the pervasiveness of small business exposure in the U.S. labor market. According to NLSY data that reflect work history over a 15-year period (1989-2004), at least 3 of every 4 workers have had small establishment work experience, even in the age range of 24-47. Moreover, a high proportion of these same workers are employed in small single-establishment firms.