Comment on David G. Blanchflower : Is More Self-Employment Good or Bad?

This comment provides a critical evaluation of Blanchflower's (2004) survey of various aspects of self-employment and his overall normative conclusion that "more may not be better". In order to draw normative conclusions regarding the optimal level of self-employment a number of issues ignored by Blanchflower need to be addressed. First, self-employment may or may not be entrepreneurial. Second, it could be a second-best solution to institutional deficiencies at either the firm or the social level. Third, one should distinguish between rent seeking and productive activities. Fourth, over time and across industries the optimal level of self-employment is likely to vary for structural and technological reasons. Fifth, questionnaire evidence on self-reported relative satisfaction should be interpreted with caution. After all, by volitionally choosing self-employment the individual in question has revealed her preferences