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Effects of self-employment on hospitalizations: instrumental variables analysis of social security data

Author

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  • Judite Gonçalves

    (Universidade Nova de Lisboa)

  • Pedro S. Martins

    (Universidade Nova de Lisboa
    Queen Mary University of London
    Institute of Labor Economics (IZA)
    Global Labor Organization)

Abstract

The importance of self-employment and small businesses raises questions about their health effects and public policy implications, which can only be addressed with suitable data. We explore the relationship between self-employment and health by drawing on comprehensive longitudinal administrative data to explore variation in individual work status and by applying novel instrumental variables. We focus on an objective outcome—hospital admissions—that is not subject to recall or other biases that may affect previous studies. Our main findings, based on a sample of about 6,500 individuals followed monthly from 2005 to 2011 and who switch between self-employment and wage work along that period, suggest that self-employment has a positive effect on health as it reduces the likelihood of hospital admission by at least half.

Suggested Citation

  • Judite Gonçalves & Pedro S. Martins, 2021. "Effects of self-employment on hospitalizations: instrumental variables analysis of social security data," Small Business Economics, Springer, vol. 57(3), pages 1527-1543, October.
    • Handle: RePEc:kap:sbusec:v:57:y:2021:i:3:d:10.1007_s11187-020-00360-w
    DOI: 10.1007/s11187-020-00360-w
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    Cited by:

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    More about this item

    Keywords

    Self-employment; Hospitalization; Mortality; Small businesses;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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