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Self-employment and over-indebtedness in Poland: Modelling income and debt repayments distribution



Objective: The objective of the article is to assess financial situation and debt repayments in households of self-employed individuals and compare them to these of other types of households. The article aims to identify the determinants of over-indebtedness.

Research Design & Methods: The study focuses on households of self-employed. The results are based on a nationwide CATI survey conducted among 1107 Polish indebted households. Theoretical models of the income distribution (log-logistic, Burr III) and the power-exponential model were used to achieve the research goals.

Findings: The economic status of indebted households differentiates income and debt repayments distributions. Self-employed households have a better financial situation and greater inequalities than households of the paid employees and individuals sustaining themselves from other sources of income. The debt repayments of entrepreneurs are higher than in households of paid employees but lower than in other groups of households. The determinants of over-indebtedness are essentially similar regardless of the work status, but the impact of income, number of loans, and debt type on over-indebtedness is greater for self-employed households.

Implications & Recommendations: The results on the debt repayments distribution and determinants of over-indebtedness may be helpful in creating regulations that preventing household bankruptcies and policies aimed at combating social exclusion.

Contribution & Value Added: Introducing the issue of self-employment into the discussion on income and debt distribution and identifying the over-indebtedness among households of self-employed. To assess the debt repayments, we adopt theoretical income distributions and unique source of data on Polish households in debt.


self-employed, household, over-indebtedness, income distribution, debt repayments

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Author Biography

Agnieszka Wałęga

PhD, Assistant Professor at Cracow University of Economics (Poland), Department of Statistics at College of Economics, Finance, and Law. Her research interests include social and labour statistics, statistical analysis of household budgets, poverty, well-being and household indebtedness (especially over-indebtedness).


Grzegorz Wałęga

PhD, Assistant Professor at Cracow University of Economics (Poland), Department of Microeconomics at the College of Economics, Finance, and Law. He conducts research on household debt, over-indebtedness and financial well-being. His research interests focus on household economics, household finance and microeconomics.


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