Are entrepreneurs liquidity constraint? Using quasi-random housing wealth variation resulting from communist era decisions, we argue yes, as we find that wealthier East Germans are more likely to become self-employed after reunification. In the literature, no such strong relationship was found...

While some researchers have suggested that the self-employment (SE) sector is a haven during a financial crisis, others believe that SE is not necessarily the desired outcome, but an indicator that the labor market is tightening for some groups. Few researchers have compared the SE sector before...

The well-documented positive correlation between income risk and wealth was interpreted as evidence for high amounts of precautionary wealth in various studies. However, the large estimates emerged from pooling non-entrepreneurs and entrepreneurs without controlling for heterogeneity. This paper...