The Role of Wealth in the Start-Up Decision of New Self-Employed: Evidence from a Pension Policy Reform
33 Pages Posted: 27 Aug 2015
Date Written: August 26, 2015
We used administrative micro panel data from the Netherlands to study the wealth effect on the transitions of workers from wage-employment to self-employment. To isolate the causal effect of wealth, we used a pension system reform in 2006 as a quasi-natural experiment. With the onset of the reform, wage-employees born on or after 1 January 1950 faced a substantial reduction of their pension wealth. Our empirical results are robust to the checks on the anticipation effects and the placebo effects, and show that the (pension) wealth change has a significant positive causal effect on the transition into self-employment.
Keywords: Self-employment, pension policy reform, exogenous wealth shock
JEL Classification: J26, J62, L26, C36
Suggested Citation: Suggested Citation