Windfalls, Wealth, and the Transition to Self-Employment
Posted: 3 Aug 2006
We examine the transition to, and survival in, self-employment among a sample of British workers. We find evidence of capital constrains, with wealthier individuals being more likely to transit ceteris paribus. Windfall gains raise the probability of transition at a decreasing rate - gains or more than £20000-£22000 reduce the probability of transition - and larger gains reduce the probability of transition amongst relatively wealthier respondents. We also find peculiarities in the effects of particular types of windfall; redundancy payments and inheritances raise the probability of transition, whilst lottery wins reduce the probability of (especially male) transitions. In contrast, inheritances (lottery wins) hinder (augment) self-employment survival.
Keywords: Self-employment, transitions, windfalls
JEL Classification: J0, J5, J23
Suggested Citation: Suggested Citation