Chapter 5: The Association of Disability and Health Self-Perception to Entering and Leaving Self-Employment

Using data from the German Socio-Economic Panel (SOEP) waves from 1994 to 2018, this study analyzes the relationship of disability and health status with the likelihood that 25- to 64-year-old individuals in Germany enter, maintain, or leave self-employment. The variable of “disability” is based on medical examinations by professionals, whereas the measurement of the quality of an individuals’ health and their satisfaction is based on self-assessments. Although in common sense health and official disability status might seem similar, from a theoretical and medical perspective, they are discrete constructs and thus, the relationship of each variable to selfemployment differs by a considerable amount. Logistic regressions in this study illustrate how the process of entering self-employment is not significantly associated with the disability status of an individual, but rather to his or her health characteristics. These results indicate that individuals aiming to enter self-employment in Germany need a certain amount of health capital to start a business. In contrast, a regression analysis demonstrates a strong link between individuals leaving self-employment and disability status, with a relatively slight impact of health characteristics. These results imply that disabled self-employed individuals in Germany confront challenges to maintain their business, not due to the quality of their health, but rather from other contextual factors. This study contributes to the discussion of the two concepts—health and disability—and delivers insights regarding how future research should separately analyze these concepts, which display different empirical effects regarding self-employment.