Dependent Self-Employment: Workers on the Border between by U. Muehlberger

By U. Muehlberger

This publication investigates paintings relationships at the border among employment and self-employment. Bringing jointly monetary, sociological and criminal examine techniques, it analyses why enterprises install established self-employed employees, why contributors provide this manner of labor and in which casual and formal mechanism dependency is created.

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In this paper, outsourcing is characterised as a discrete choice between two existing alternatives: make versus buy. However, they argue that 'make' is only a meaningful alternative when the establishment already possesses the technology and the type of 24 Dependent Self-Employment workforce capable of carrying out these activities within its own facilities. Consequently, their research focuses on the decision-making situation in which management still has in-house capability. Using logistic regression models, Harrison and Kelley (1993) find that plants with higher labour costs (in terms of average hourly wages) are more likely to source out than plants with lower wage costs.

The importance of each of these sets, so the argument goes, determines the optimal ownership of trucks. The results show that improved contracting through better control mechanisms (in this case through the use of on-board computers) leads to more integrated asset ownership and, thus, to larger firms. Improved contracting changes the set of decision rights through the allocation of residual control rights to the owner of the asset. Baker and Hubbard (2004) find that 'owner-operators are used for hauls where non-contractible decisions that affect trucks' value are important, but are used less once decisions become more contractible'.

Finally, job satisfaction and the ability to decide their own hours of work were highlighted as the main advantages for self-employed workers as compared to employees. In sum, those who prefer self-employment emphasised that independence in carrying out the job, job satisfaction, opportunities to earn higher than average wages and the advantages of the tax system were the main reasons for preferring self-employment over employment. Nisbet (1997) concludes that segmentation in the form of dualism is undermined by the existence of discrete advantages generally perceived to exist in both employment and dependent self-employment.

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