Age-specific entrepreneurship and PAYG: Public pensions in Germany

We present new empirical evidence on the distribution of earnings, income and wealth among entrepreneurs in Germany. document that both earnings are more concentrated than workers describe a large-scale overlapping-generations model can replicate these findings. As an application, we compute equilibrium effects reform German pay-as-you-go pension system which must also contribute receive pension. show presence mobility between entrepreneurs, expected lifetime utility all newborn households unanimously declines due to general lower aggregate savings, welfare losses amount approximately 5% total consumption. In addition, integration self-employed into social security Germany does not help improve its fiscal sustainability, only increase retirement age 70 years will finance pensions at level beyond year 2050.