Are “Voluntary” Self-Employed Better Prepared for Retirement Than “Forced” Self-Employed?

When it comes to financial preparation for retirement, self-employed workers in many European countries face unique challenges not encountered by traditional wage earners. This is particularly true for self-employed workers because many self-employed individuals do not have large-scale access to employer-sponsored pensions, which are a mainstay of pension support for most workers in developed countries. In this investigation, we explored the saving practices and perceived future pension adequacy of self-employed workers aged 15–65 in Germany (N = 702) and the Netherlands (N = 655). Of particular interest for understanding saving practices was whether respondents felt that they voluntarily chose to become self-employed, or whether they felt “forced” to enter self-employment due to economic or labor market pressures. Forced self-employed individuals—some 25% of those who became self-employed out of necessity—were found to be less likely to save for retirement than their voluntary self-employed counterparts, and they envisioned a less optimistic future pension scenario for themselves. Discussion focuses on the need to change institutional practices and public policies that place self-employed individuals at a disadvantage—particularly those who are driven into self-employment based on economic pressures and a lack of opportunities in the traditional labor market.