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Financial Constraints and Self-Employment in France, 1945-2014

Author

Listed:
  • A. BAUER

    (Insee, Crest)

  • B. GARBINTI

    (Banque de France, Crest)

  • S. GEORGES-KOT

    (Insee, Crest)

Abstract

This paper studies the evolution over time of the effects on entry and survival into self-employment of inheritance receipt and real estate price variations. We focus on France over the period 1945-2014, and we estimate these effects by comparing (i) current inheritors with future inheritors and (ii) homeowners without a mortgage outstanding to renters or to those with a mortgage outstanding, for whom home equity extraction is not possible in France. Our main finding is that the effect of both wealth shocks on men’s entry into self-employment has decreased over time; we find no significant effect of either wealth shock since the mid-2000s. We discuss potential causes for this trend, including changes in the financial regulation and in the sectoral composition of the economy. We also find no evidence of an effect of wealth shocks on women’s entry into self-employment, at any point in time.

Suggested Citation

  • A. Bauer & B. Garbinti & S. Georges-Kot, 2018. "Financial Constraints and Self-Employment in France, 1945-2014," Documents de Travail de l'Insee - INSEE Working Papers g2018-08, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2018-08
    as

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    File URL: https://www.bnsp.insee.fr/ark:/12148/bc6p06zrg5m/f1.pdf
    File Function: Document de travail de la DESE numéro G2018/08
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    References listed on IDEAS

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    11. Steffen Andersen & Kasper Meisner Nielsen, 2012. "Ability or Finances as Constraints on Entrepreneurship? Evidence from Survival Rates in a Natural Experiment," The Review of Financial Studies, Society for Financial Studies, vol. 25(12), pages 3684-3710.
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    16. repec:oup:rfinst:v:25:y::i:12:p:3684-3710 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Gilbert Cette & Lorraine Koehl & Thomas Philippon, 2019. "The Labor Share in the Long Term: A Decline?," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 510-511-5, pages 35-51.
    2. Bertrand Garbinti & Frédérique Savignac, 2020. "Accounting for Intergenerational Wealth Mobility in France over the 20th Century: Method and Estimations," Working papers 776, Banque de France.
    3. Pierre PORA & Lionel WILNER, 2019. "Child Penalties and Financial Incentives: Exploiting Variation along the Wage distribution," Working Papers 2019-17, Center for Research in Economics and Statistics.
    4. J.-P. Cling & S. Eghbal-Teherani & M. Orzoni & C. Plateau, 2019. "The Differences between EU Countries for Sustainable Development Indicators: It is (mainly) the Economy!," Documents de Travail de l'Insee - INSEE Working Papers g2019-06, Institut National de la Statistique et des Etudes Economiques.
    5. repec:ces:ifodic:v:16:y:2018:i:2:p:50000000002755 is not listed on IDEAS
    6. P. Givord & M. Suarez Castillo, 2019. "Excellence for all? Heterogeneity in high-schools’ value-added," Documents de Travail de l'Insee - INSEE Working Papers g2019-14, Institut National de la Statistique et des Etudes Economiques.
    7. Alexander Krenek & Margit Schratzenstaller-Altzinger & Klaus Grünberger & Andreas Thiemann, 2021. "INTAXMOD – Inheritance and Gift Taxation in the Context of Ageing," WIFO Working Papers 645, WIFO.
    8. Bertrand Garbinti & Jonathan Goupille-Lebret, 2018. "The Impact of Inheritance and Transfer Taxation on Economic Behaviours and Inequality: A Literature Review for France," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(02), pages 13-18, August.
    9. Carole Bonnet & Fanny Godet & Anne Solaz, 2019. "Gendered economic determinants of couple formation over 50 in France," Working Papers G2019/13, French Institute for Demographic Studies.
    10. Margit Schratzenstaller, 2023. "Behavioral Responses to Inheritance Taxation. A Review of the Empirical Literature," WIFO Working Papers 668, WIFO.
    11. Philippe CHONÉ & Lionel WILNER, 2019. "Competition on Unobserved Attributes: The Case of the Hospital Industry," Working Papers 2019-21, Center for Research in Economics and Statistics.
    12. A. Godzinski & M. Suarez Castillo, 2019. "Short-term health effects of public transport disruptions: air pollution and viral spread channels," Documents de Travail de l'Insee - INSEE Working Papers g2019-03, Institut National de la Statistique et des Etudes Economiques.
    13. Bertrand Garbinti & Frédérique Savignac, 2020. "Intergenerational Home Ownership in France over the Twentieth Century," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 411-435, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    self-employment; credit constraints; inheritance; collateral channel;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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