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Effects of self-employment on hospitalizations: instrumental variables analysis of social security data

Judite Gonçalves () and Pedro Martins

Small Business Economics, 2021, vol. 57, issue 3, No 22, 1527-1543

Abstract: Abstract The importance of self-employment and small businesses raises questions about their health effects and public policy implications, which can only be addressed with suitable data. We explore the relationship between self-employment and health by drawing on comprehensive longitudinal administrative data to explore variation in individual work status and by applying novel instrumental variables. We focus on an objective outcome—hospital admissions—that is not subject to recall or other biases that may affect previous studies. Our main findings, based on a sample of about 6,500 individuals followed monthly from 2005 to 2011 and who switch between self-employment and wage work along that period, suggest that self-employment has a positive effect on health as it reduces the likelihood of hospital admission by at least half.

Keywords: Self-employment; Hospitalization; Mortality; Small businesses (search for similar items in EconPapers)
JEL-codes: C26 I18 J24 L26 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11187-020-00360-w

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