Self-employment through the COVID-19 pandemic: An analysis of linked monthly CPS data

Abstract The COVID-19 pandemic that began in the United States in March of 2020 had a profound adverse effect on the economy. In particular, the pandemic had a harsh impact on women, minorities, and self-employed individuals. However, research on why the pandemic hit some groups harder is in its nascent stages. We contribute to the growing body of knowledge by comparatively analyzing the inability to work due to the pandemic in the wage and self-employment sectors. We utilize data from the Current Population Survey from May 2020 to May 2021 to investigate the effect of individual, business, and geographic characteristics on the probability of work interruption in each sector. We find that self-employers were much harder hit but fared better than wage workers in several of the harder-hit sectors and when they had incorporated businesses. We also find that women, non-Whites, and Hispanics were more adversely affected in both sectors.