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

See all articles by Yue Li

Yue Li

VU University Amsterdam; Netspar

Mauro Mastrogiacomo

De Nederlansdche Bank (DNB); Vrije Universiteit Amsterdam, School of Business and Economics

Stefan Hochguertel

VU University Amsterdam; Tinbergen Institute

Hans Bloemen

VU University Amsterdam; IZA Institute of Labor Economics; Tinbergen Institute; Netspar

Date Written: August 26, 2015

Abstract

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

Li, Yue and Mastrogiacomo, Mauro and Hochguertel, Stefan and Bloemen, Hans, The Role of Wealth in the Start-Up Decision of New Self-Employed: Evidence from a Pension Policy Reform (August 26, 2015). Netspar Discussion Paper No. 08/2015-026, Available at SSRN: https://ssrn.com/abstract=2651104 or http://dx.doi.org/10.2139/ssrn.2651104

Yue Li

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Mauro Mastrogiacomo (Contact Author)

De Nederlansdche Bank (DNB) ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands
+31(0)20 444 6037 (Phone)
+31(0)20 444 6004 (Fax)

Stefan Hochguertel

VU University Amsterdam ( email )

Dept Econ (FEWEB)
De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 59 86033 (Phone)
+31 20 59 89870 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Hans Bloemen

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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