Time allocation by the self-employed: the determinants of the number of working hours in start-ups

This article examines determinants of working hours by self-employed, explicitly discriminating between preference and productivity effects. A simple model of working hours is derived, not requiring expected profit data. The model is estimated using data from a Dutch survey of 1350 start-ups. Outsourcing and number of employees appear related to both preference and productivity. The model has out-of-sample predictive power for the number of working hours.