The necessity of self-employment towards retirement: Evidence from labor market dynamics and search requirements for unemployment benefits

This paper investigates whether individuals at the end of working life choose self-employment
out of necessity and to what degree job search requirements for unemployment benefits induce
people to become self-employed. For this purpose we analyze labor market transitions for people
between the ages of 50 and 63 using a dynamic multinomial logit model with unobserved
heterogeneity.
The results indicate that at the end of the career individuals with a weak labor market position
have a relatively high probability to become self-employed, e.g. to end or avoid a period
of unemployment or inactivity (necessity driven self-employment). Contrasting some earlier
work, the results do not suggest that self-employment is used as a gradual retirement route for
employees. A difference-in-differences analysis shows that job search requirements among unemployed older workers increased the outflow from unemployment and decreased the inflow
into unemployment, but did not increase self-employment out of necessity or opportunity.

Netspar, Network for Studies on Pensions, Aging and Retirement, is een denktank en kennisnetwerk. Netspar is gericht op een goed geïnformeerd pensioendebat.

MEER OVER NETSPAR


Missie en strategie           •           Netwerk           •           Organisatie           •          Podcasts
Board Brief            •            Werkprogramma 2023-2027           •           Onderzoeksagenda

OVER NETSPAR

Onze partners

B20210618_Achmea_logo_grey
B20160708_universiteit utrecht
B20160708_erasmus
B20160708_ministeries
B20210909_SPMS_logo download greyscale smaller
Bekijk al onze partners