Self-employment and the risk of poverty in old age - what's the role of pension systems in Europe?

Abstract

For a long time, the self-employed were considered to be less at risk of poverty in old age than employees. However, due to the increase of solo-self-employment and precarious forms of self-employment, today, the self-employed face a higher risk of poverty than other parts of the labour force. This is of high relevance for younger cohorts on the labour market. The chapter studies how far the duration of self-employment in the working career affects the risk of poverty in old age in twelve European welfare states and examines whether this is linked to the design of the countries’ pension systems for the self-employed. The findings show that from a cross-national perspective, a longer duration of self-employment does indeed lead to a higher risk of poverty. However, the design of old-age security for the self-employed does not affect the risk of poverty in old age in a notable manner.