Self-Employment among People with Work Limitations and Disabilities in the U.S., 1988-2009

Elena Gouskova, University of Michigan

This paper examines self-employment rates among workers with work limitations and disabilities in the US. Using data from the Current Population Survey, we show that, during the 1989-2009 period, those with work limitations were more likely to be self-employed in unincorporated businesses than their counterparts without work limitations. The result is consistent with recent empirical evidence from European countries (Boylan and Burchardt, 2002; Jones and latreillet, 2011; Pagan-Rodriguez, 2009; Pagan-Rodriguez, 2011). Additionally, the results show that the relationship between the probability of being self-employed and having a work limitation is not uniform: the self-employment gap increase with education and age. Overall, the evidence appears to favor the view that, for those with work limitations, self-employment is a voluntary choice driven by non-monetary motives. Compared to standard jobs, self-employment may provide a better accommodation of health problems by offering the flexibility of choosing location, environment, and hours of work.