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

TitleSelf–Employment, Wealth and Start–up Costs: Evidence from a Financial Crisis
Publication TypeJournal Article
Year of Publication2018
AuthorsElitcha, K, Fonseca, R
JournalThe B.E. Journal of Economic Analysis & Policy
Date PublishedSep-07-2019
KeywordsEntrepeneurship, Household, Longitudinal data, Self-employment

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.

Citation Key9825