Windfalls, Wealth, and the Transition to Self-Employment

Posted: 3 Aug 2006

See all articles by Yannis Georgellis

Yannis Georgellis

University of Kent

John G. Sessions

University of Bath; IZA Institute of Labor Economics

Nicholas NT Tsitsianis

University of Hertfordshire

Abstract

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

Georgellis, Yannis and Sessions, John G. and Tsitsianis, Nicholas NT, Windfalls, Wealth, and the Transition to Self-Employment. Small Business Economics, Vol. 25, No. 5, 2005, Available at SSRN: https://ssrn.com/abstract=921032

Yannis Georgellis

University of Kent ( email )

Canterbury, Kent CT2 7PE
United Kingdom

John G. Sessions (Contact Author)

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Nicholas NT Tsitsianis

University of Hertfordshire ( email )

Business School
De Havilland Campus
Hatfield, Hertfordshire AL10 9AB
United Kingdom
01707 285549 (Phone)

HOME PAGE: http://web-apps.herts.ac.uk/uhweb/about-us/profiles/profiles_home.cfm?profile=D9F0FDED-0795-5A63-0DC

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