Research on entrepreneurship has received an increased amount of interest in recent years, with self-employment being used as the most common proxy for “entrepreneurship” in empirical studies. However, there are various ways of defining self-employment, making it a somewhat dubious proxy....

We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment and wage employment. We then introduce labour market segmentation. In...