Entrepreneurship and Social Security
In an occupational choice framework individuals can either become entrepreneurs (risky income) or employed workers (safe income). Their choice is affected by the design of the pension system which discriminates between entrepreneurs and workers. We explore the comparative statics of several pension parameters on the occupational equilibrium, assess the normative properties of the equilibrium, and discuss some policy issues. We find that seemingly identical pension provisions may have quite different effects, depending on whether applied to entrepreneurs or to workers. Entrepreneurs and workers should be treated differently in social security schemes. No general rule that entrepreneurs need insurance for old-age income less (or more) urgently than workers can be established. Splitting wage-related social security contributions between workers and entrepreneurs is not welfare-neutral.
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Volume (Year): 57 (2000)
Issue (Month): 3 (May)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vesa Kanniainen & Timo Vesala, 2000.
"Enterprise Formation and Labor Market Institutions,"
CESifo Working Paper Series
359, CESifo Group Munich.
- Kanniainen, V. & Vesala, T., 2000. "Enterprise Formation and Labor Market Institutions," University of Helsinki, Department of Economics 483, Department of Economics.
- Sinn, Hans-Werner, 1996.
"Social Insurance, Incentives and Risk Taking,"
Munich Reprints in Economics
19834, University of Munich, Department of Economics.
- Buchholz, Wolfgang, 1991. "Tax effect in general equilibrium models with uncertainty : A generalization," Journal of Public Economics, Elsevier, vol. 45(3), pages 397-399, August.
- Pekka Ilmakunnas & Vesa Kanniainen & Uki Lammi, .
"Entrepreneurship, Economic Risks, and Risk-Insurance in the Welfare State,"
EPRU Working Paper Series
99-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Ilmakunnas, P. & Kanniainen, V. & Lammi, U., 1999. "Entrepreneurship, Economic Risks, and Risk-Insurance in the Welfare State," University of Helsinki, Department of Economics 453, Department of Economics.
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