Persistence of self-employed receiving means-tested benefits

Persistence of self-employed receiving means-tested benefitsWe analyze the situation of self-employed receiving means-tested benefits in Germany. A severe loss of income is the main reason why self-employed individuals become entitled for means-tested benefits. Despite relatively high levels of education and working hours, the income of the self-employed actually is much worse in comparison to paid employees who also receive those benefits. The majority of self-employed individuals are able to improve their incomes and end their need of means-tested benefits within two years after entry. However, some self-employed remain in need for longer periods. In general, our results are suggestive of positive effects for the self-employed because it provides them with the required time for restructuring their businesses and for improving their incomes.

Pahnke, A.; Schneck, S.; Wolter, H.-J. (2019): Persistenz von Selbstständigen in der Grundsicherung, in: IfM Bonn, IfM-Materialien Nr. 273, Bonn.

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