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Macro/International Seminar - Tommaso Porzio (Columbia Business School)

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Location: S2.79

Title: Self-employment within the firm

Abstract: We collect time-use data for entrepreneurs and their workers in over 1,000manufacturing firms in urban Uganda. We document limited labor special-ization within the firm for establishments of all sizes and argue that this islikely due to the prevalence of product customization. We then develop a gen-eral equilibrium model of task assignment within the firm, estimate it withour data, and find large barriers to labor specialization. This setting is close,in terms of aggregate productivity and firm scale, to an extreme benchmarkin which each firm is just a collection of self-employed individuals sharing aproduction space. Given how firms are organized internally, the benefits fromalleviating other frictions that constrain firm growth are muted: most Africanfirms resemble artisanal workshops whose business model is not easily scalable

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