Work

Self-Employment in Italy: The Role of Social Security Wealth

Year: 2016

Type: article

Abstract: Using a rich micro dataset drawn from administrative archives, we explore whether Social Security Wealth (SSW) is an important factor affecting the decision to become self-employed. We focus on the two main categories of self-employed professions covered by the Italian public pension system: craftsmen and shopkeepers. We use the large exogenous variation in individual expected SSW that occurred as a result of the policy reform process undertaken in Italy during the 1990s to identify the effect of this variable and we study how the probability of being self-employed or employed depends, amongst other things, on the difference in the expected SSW that accrues under the two alternative employment scenarios. Our key finding is that a higher difference in expected SSW from self-employment compared with employment has a positive effect on the probability of being self-employed and on the probability of switching to self-employment, whereas it has a negative effect on the probability of switching from self-employment to employment.

Source: Journal of Pensions Economics and Finance

DOI: 10.2139/ssrn.2743103

Authors: MARGHERITA BORELLA, MICHELE BELLONI

Institutions: Collegio Carlo Alberto, University of Turin, Ca' Foscari University of Venice

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, No poverty

Open Access status: green

Funder: Network for Studies on Pensions, Aging and Retirement