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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Ludwig, Sandra / Schmitz, Hendrik

Ed. by Auriol, Emmanuelle / Barigozzi, Francesca / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / de Vries, Frans / Wenzel, Tobias / Zulehner, Christine

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Volume 18, Issue 3


Volume 19 (2019)

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

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

Koffi Elitcha / Raquel Fonseca
Published Online: 2018-07-21 | DOI: https://doi.org/10.1515/bejeap-2017-0187


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.

Keywords: self-employment; occupational choice; wealth; start-up costs; financial crisis

JEL Classification: E02; E21; J21; J24


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About the article

Published Online: 2018-07-21

Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 18, Issue 3, 20170187, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/bejeap-2017-0187.

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