Self-Employment and Health: Barriers or Benefits?

Authors

  • Cornelius A. Rietveld,

    Corresponding author
    1. Department of Applied Economics, Erasmus School of Economics, Erasmus University Rotterdam, DR, Rotterdam, the Netherlands
    • Correspondence to: Department of Applied Economics, Erasmus School of Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, the Netherlands. E-mail: nrietveld@ese.eur.nl

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  • Hans van Kippersluis,

    1. Department of Applied Economics, Erasmus School of Economics, Erasmus University Rotterdam, DR, Rotterdam, the Netherlands
    2. Tinbergen Institute Rotterdam, PA, Rotterdam, the Netherlands
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  • A. Roy Thurik

    1. Department of Applied Economics, Erasmus School of Economics, Erasmus University Rotterdam, DR, Rotterdam, the Netherlands
    2. Tinbergen Institute Rotterdam, PA, Rotterdam, the Netherlands
    3. Panteia, Zoetermeer, AA, the Netherlands
    4. GSCM-Montpellier Business School, Montpellier, France
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Abstract

The self-employed are often reported to be healthier than wageworkers; however, the cause of this health difference is largely unknown. The longitudinal nature of the US Health and Retirement Study allows us to gauge the plausibility of two competing explanations for this difference: a contextual effect of self-employment on health (benefit effect), or a health-related selection of individuals into self-employment (barrier effect). Our main finding is that the selection of comparatively healthier individuals into self-employment accounts for the positive cross-sectional difference. The results rule out a positive contextual effect of self-employment on health, and we present tentative evidence that, if anything, engaging in self-employment is bad for one's health. Given the importance of the self-employed in the economy, these findings contribute to our understanding of the vitality of the labor force. Copyright © 2014 John Wiley & Sons, Ltd.

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