Market, State, and the Quality of New Self-Employment Jobs among Men in the U.S. and Western Germany

Abstract

Recent scholarship suggests that a new form of low-quality, contingent self-employment is taking hold in postindustrial economies. Using longitudinal data on men from the Panel Study of Income Dynamics and theGerman Socio-Economic Panel, I find that on average men in Germany and the U.S. do not fare poorly in self-employment, and in both countries a substantial number of new self-employment jobs offer prospects for earnings and stability that rival the wage-and-salary sector. However, there is far more variability in the U.S., with a higher proportion of self-employment jobs ranking among the best and the worst new jobs in the labor market. New entrepreneurs benefited more in the U.S. than in Germany from exploiting the demand for skilled postindustrial services in the self-employment market. At the same time, loosely structured labor markets and weaker worker protections contributed to a larger proportion of low-paring and unstable self-employment jobs in the U.S.