XXXIX заседание регулярного научного семинара департамента экономики

На XXXIX заседании научного семинара департамента экономики Санкт-Петербургской школы экономики и менеджмента НИУ ВШЭ с докладом «Necessity Entrepreneurs: General Equilibrium Theory of Occupational Choice under Uncertainty» выступит Покровский Дмитрий Александрович (доцент департамента экономики СПб ШЭМ НИУ ВШЭ). Семинар состоится 10 ноября в 16:50 по адресу: Кантемировская улица, д.3, корп. 1, лит. А, ауд. 247. Ждем всех заинтересовавшихся преподавателей, исследователей, студентов.

Аннотация:

The aim of this paper is to model the occupational choice under uncertainty. We assume that individuals decide upon their occupation comparing their expected after-tax profit as entrepreneurs and their expected income as job market candidates. The uncertainty disappears through learning by doing. Entrepreneurs reveal their entrepreneurial abilities when running a firm. The result of the competition between demand and supply on the labor market also becomes known. If demand prevails over supply then paid employment is the alternative to entrepreneurship; otherwise, unemployment is. Observing variables that have been uncertain earlier, individuals alter their occupational choice if the alternation gives them a higher income.

In order to separate the role of uncertainty, we simplify the description of the labor market assuming that workers are homogeneous. This assumption equalizes wages.

We claim that in equilibrium,  more talented entrepreneurs earn more than workers, whereas the after-tax profit of less talented entrepreneurs fills in the income gap between the unemployment benefit and the after-tax wages. These less talented entrepreneurs are naturally interpreted as necessity entrepreneurs. They are forced into entrepreneurship, as the demand for labor is fully satisfied and they are not able to get a job offer.

Heterogeneity of entrepreneurs induces heterogeneity of firms' size. Predictably, more talented entrepreneurs organize larger firms.

Uncertainty on the labor market is crucial in our explanation of the necessity entrepreneurs. Uncertainty in individuals' entrepreneurial abilities is added to make the model more realistic. We assume that individuals have correct but vague judgments regarding their entrepreneurial abilities. In more details, the initial occupational choice is made by each individual under knowledge of all individuals' true distribution of abilities and her own distribution of abilities. If an individual runs a firm, she reveals that her abilities coincide with the value considered initially as the expected abilities.

We address the question how the degree of vagueness affects equilibrium. We argue that a part of potential necessity entrepreneurs enters the labor market at the initial occupational choice and gets a job offer. The lesser this part is, the stronger the economy benefits, as the number of entrepreneurs enlarges. In the framework of our model, individuals overestimate their entrepreneurial profit. If the degree of vagueness increases, the overestimation enlarges. Then a larger part of potential necessity entrepreneurs avoids the labor market at the initial occupational choice and eventually does become entrepreneurs.