Computerization and the Decline of Unincorporated Self-Employment

We investigate the effect of the computer adoption rate, referred to as computerization, on the proportion of unincorporated self-employed individuals within the US labor markets. The conceptual framework suggests that computerization may either augment or diminish this share. Employing a Bartik instrument approach, we disentangle the causal effect of computerization on unincorporated self-employment from 1990 to 2010. Our empirical findings indicate that a 1% increase in computerization corresponds to a 0.79% reduction in the share of unincorporated self-employed individuals. Notably, these estimates exhibit variations across industries and metropolitan areas.

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Publication Details

Journal
Journal of Human Capital
Published
2025-02-03
DOI
https://doi.org/10.1086/735105
Primary Topic
Labor market dynamics and wage inequality
Type
article
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article

Computerization and the Decline of Unincorporated Self-Employment

Yao‐Yu Chih, Zexuan Liu, Sunhyung Lee
Journal of Human Capital
Labor market dynamics and wage inequality
article

Computerization and the Decline of Unincorporated Self-Employment

Yao‐Yu Chih, Zexuan Liu, Sunhyung Lee
article en

Abstract

We investigate the effect of the computer adoption rate, referred to as computerization, on the proportion of unincorporated self-employed individuals within the US labor markets. The conceptual framework suggests that computerization may either augment or diminish this share. Employing a Bartik instrument approach, we disentangle the causal effect of computerization on unincorporated self-employment from 1990 to 2010. Our empirical findings indicate that a 1% increase in computerization corresponds to a 0.79% reduction in the share of unincorporated self-employed individuals. Notably, these estimates exhibit variations across industries and metropolitan areas.

Journal of Human CapitalVol. 19(4)
Montclair State University (US), Nanjing Audit University (CN)
Decent work and economic growth
Openalex Percentile: Top 97%
Labor market dynamics and wage inequality
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