Labour Market Trajectories of the Self-employed in the Netherlands

Abstract

This paper employs sequence analysis to study the labour market trajectories of the self-employed. Using Dutch administrative data on more than 50,000 individuals including 13,000 with self-employment experience between 1989 and 2017, we find seven different clusters with distinct life-cycle patterns of several types of self-employment, wage employment, and non-employment. We find large heterogeneity across clusters in terms of income, wealth, and pension accumulation. In particular, the clusters of individuals with short self-employment spells but little labour market attachment in other periods are an economically vulnerable group, whereas those who are persistently self-employed are not worse off than employees.