ABSTRACT
In this chapter we focus on the hours worked by the self-employed. Fortunately, there is a well-established theoretical framework to go with the labour supply decision. The theory views the self-employed as carrying out a work supply plan over life. It predicts that the intertemporal substitution elasticity is positive: a self-employed person plans to increase work when Wageis expected to rise. In addition to this elasticity, this chapter looks at other life-cycle factors which can conceivably affect the decision as to hours worked. We also compare the results of this model of the self-employed work supply with that of the paid manual work, and also paid non-manual work.
