The role of wealth in the start-up decision of new self-employed: Evidence from a pension policy reform

Yue Li, Mauro Mastrogiacomo, Stefan Hochguertel and Hans Bloemen ()

Labour Economics, 2016, vol. 41, issue C, 280-290

Abstract: We study whether wealth affects transitions from wage-employment to self-employment using a large sample from administrative panel data for the Netherlands. To isolate the causal effect of wealth, we rely on a reform of the pension system that abolished preferential tax treatment of early retirement for cohorts born after January 1, 1950. This exogenous reduction in pension wealth has a significant negative effect on the transition into self-employment. We compute that the average reduction of net future pension wealth by 16,000 euros in our sample, triggered by the reform, reduces the transition rate into self-employment by 38%.

Keywords: Self-employment; Pension policy reform; Exogenous wealth shock (search for similar items in EconPapers)
JEL-codes: C36 J26 J62 L26 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:41:y:2016:i:c:p:280-290

DOI: 10.1016/j.labeco.2016.05.028

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