Why Self-Employment Rates Are Higher Among People With Work Limitations

Abstract

Using data from the Current Population Survey, the authors studied self-employment among people with work limitations in the United States. They found that self-employment rates are higher among workers with limitations compared with workers without limitations. Furthermore, the self-employment differential increases with education and age. This investigation of possible explanations has revealed that expected wage differences between self-employed people and employees are similar between disability groups but average work hours are lower and more variable among the self-employed with work limitations. This evidence is consistent with the view that people with disabilities might choose self-employment because of non-monetary motives.