Hiring for Self-Employed and Microbusinesses

The Council commissioned research on sole proprietorships and the factors leading to these firms’ first hires. The purpose was to discover how to best support the employment growth of microbusinesses.

 

The researchers used panel data from the Panel Study of Income Dynamics (PSID) for 1997-2011 from the University of Michigan, and cross-sectional data from the 2007 Survey of Business Owners from the United States Census Bureau. This study examined barriers to and opportunities for hiring among self-employed individuals and microbusinesses, with a focus on how male and female business owners make decisions to hire employees. The researchers investigated the individual characteristics and family dynamics of business owners, firm characteristics, and external market conditions.

 

For the purpose of this study, the authors define a small business as having 5-9 employees and a large business as having 10 or more employees. A microbusiness has 1-4 employees; this definition is common but not universally accepted. “Self-employed” describes a business owner who may or not have employees.