Personal Wealth and Self-Employment

64 Pages Posted: 29 Jun 2020 Last revised: 6 Jul 2022

See all articles by Aymeric Bellon

Aymeric Bellon

UNC Kenan-Flagler Business School

Tony Cookson

affiliation not provided to SSRN

Erik Gilje

University of Pennsylvania - The Wharton School

Rawley Heimer

Arizona State University (ASU) - W.P. Carey School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: June 2020

Abstract

We examine how wealth windfalls affect self-employment decisions using data on cash payments from claims on Texas shale drilling to people throughout the United States. Individuals who receive large wealth shocks (greater than $50,000) have 51% higher self-employment rates. The increase in self-employment rates is driven by individuals who lengthen existing self-employment spells, and not by individuals who leave regular employment for self-employment. Moreover, the effect of wealth reverts for individuals whose payments run out. Rather than alleviating a financial constraint, our evidence suggests that unrestricted cash windfalls affect self-employment decisions primarily through self-employment’s non-pecuniary benefits.

Suggested Citation

Bellon, Aymeric and Cookson, Tony and Gilje, Erik and Heimer, Rawley, Personal Wealth and Self-Employment (June 2020). NBER Working Paper No. w27452, Available at SSRN: https://ssrn.com/abstract=3637754

Aymeric Bellon (Contact Author)

UNC Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Tony Cookson

affiliation not provided to SSRN

Erik Gilje

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Rawley Heimer

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

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