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In the second part of the paper we explore models of occupational attainment among immigrants and the native born.
Early models of occupational choice (Lucas 1978; Rosen 1982; Jovanovic 1994) ignore the realistic alternative of working alone as own-account self-employed.
See, e.g., Pavan (2011), Flabbi and Moro (2012) and Joubert (2015) who estimate dynamic models of occupational choice with search frictions.
This is the case, for instance, in models of occupational choice à la Lucas (1978) under the presence of distortions that impose restrictions on firms' size, see for instance Guner et al.
Our paper is motivated by the observation that existing models of occupational choice ignore the decision of the self-employed to hire employees, or not, and limit occupational choice to employers and employees.
Moreover, the two models of occupational balance which are based on empirical quantitative and qualitative data [ 10, 47] also challenge a unidimensional conceptualisation of occupational balance.
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The non-randomness of occupation selection is controlled for by estimating in the first stage a probit model of occupational choice.
He then constructs a model of occupational choice with skill-biased change in entrepreneurial technology that can account for this facts.
Amaral and Quintin (2010) present a model of occupational choice in which poor enforcement can generate big output losses by increasing the use of less productive technologies.
For this purpose, we estimate a regression model of occupational rates as a function of average productivity, controlling for unemployment rates and for time and region fixed effects, using the AACC data.
This paper extends the (Lucas, Bell J Econ 9 508 523,1978) model of occupational choices by individuals with different skills, beyond the simple options of self-employment or wage-employment, by including a second choice for the self-employed.
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