Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/130226 
Year of Publication: 
2016
Series/Report no.: 
IWH Discussion Papers No. 11/2016
Publisher: 
Leibniz-Institut für Wirtschaftsforschung Halle (IWH), Halle (Saale)
Abstract: 
In this paper, we study the relationship between financial literacy and self-employment. We use established financial knowledge-based questions to measure financial literacy levels. The analysis shows a highly significant correlation between self-employment and financial literacy scores. To investigate the impact of financial literacy on being self-employed, we apply instrumental variable techniques based on information on economic education before entering the labour market and education of parents. Our results reveal that financial literacy positively affects the probability of being self-employed. As financial literacy is acquirable, findings suggest that entrepreneurial activities may be raised via enhancing financial knowledge.
Subjects: 
financial literacy
financial sophistication
self-employment
JEL: 
A20
D03
J23
J24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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