Financial Literacy and Self‐Employment

This article uses individual-level data collected in the Household, Income and Labour Dynamics Australia (HILDA) survey 2016 to econometrically explore direction of causation between financial literacy self-employment. The empirical approach is based on applying instrumental variables (IV) analysis a three-outcome labour supply model (i.e. self-employment, employee employment non-employment) that controls for selection into employment. In keeping with small number studies, suggests there positive relationship also likely causal from However, this found Therefore, policies aimed at increasing will not only increase self-employment but may be form “general human capital,” such as education, work experience or training. impact larger (more positive) compared Clearly much more research needed understand numerous relationships other market outcomes.