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Self–Employment, Wealth and Start–up Costs: Evidence from a Financial Crisis

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  • Elitcha Koffi

    (Department of Economics, UQAM: 320 Ste-Catherine Street East, Montreal(Quebec), H2X 1L7, Canada)

  • Fonseca Raquel

    (Department of Economics (UQAM), CIRANO and RAND, Montreal, Canada)

Abstract

Using individual-level data from three uniquely comparable surveys (Survey of Health, Ageing and Retirement in Europe, English Longitudinal Study of Ageing and Health and Retirement Study) in Europe and the United States, as well as the World Bank’s Doing Business data, this paper empirically zeroes in on the impact of start-up costs on the self-employment–wealth relationship. The longitudinal nature of the data enables us to investigate the potential effects of the last global financial crisis. Results confirm the strong positive relationship between the entrepreneurial choice and wealth as well as the negative effect that stems from the increase in start-up costs. Interestingly, although there is no strong evidence that wealth in itself played a bigger role during the crisis, we find that the negative impact of start-up costs on the entrepreneurship–wealth relationship proved to be significantly pronounced during the last crisis.

Suggested Citation

  • Elitcha Koffi & Fonseca Raquel, 2018. "Self–Employment, Wealth and Start–up Costs: Evidence from a Financial Crisis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-28, July.
    • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:3:p:28:n:2
    DOI: 10.1515/bejeap-2017-0187
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    More about this item

    Keywords

    self-employment; occupational choice; wealth; start-up costs; financial crisis;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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