How does self‐employment affect pension income? A comparative analysis of European welfare states. (3rd December 2020)

• Record Type: Journal Article
• Authors: Höppner, Julia
• Is Part Of: Social policy & administration. Volume 55:Number 5(2021)
• Page Start: 921
• Page End: 939
• Publication Date: 2020-12-03
• Subjects: gender -- pension income -- pensions and retirement -- self‐employed persons -- SHARE data; Social policy -- Periodicals; Public administration -- Periodicals; 361.6105
• DOI: 10.1111/spol.12676
• Languages: English
• ISSNs: 0144-5596

Abstract

Abstract: The characteristics of self‐employment in Europe have changed profoundly in the last decades. The share of solo self‐employment has grown and individuals combine more frequently dependent employment with self‐employment at the same time, or more often switch between dependent employment and self‐employment. These developments heavily affect the pensions of the self‐employed and therefore present a challenge for the old‐age security systems of European welfare states. So far, there has been little comparative research on how periods of self‐employment in the working career affect pension income in different European welfare states and how this is linked to the institutional design of pension systems. The paper contributes to filling this research gap by investigating the effect of self‐employment in the working career on individuals' pension income in 11 European countries. The findings show that self‐employment has a negative effect on total pensions of men and women. However, country differences are not significant in men, while in women only in the case of Poland and Belgium are there significant but contradictory effects of the share of self‐employment in the working career on total pensions. These effects are due to pension regulations concerning the contribution and benefit calculation rules for self‐employed persons.