The self-employed, financial distress, and material deprivation experienced by their children: Panel data evidence from the UK

This article investigates the impact that financial distress experienced by self-employed individuals has on the material deprivation faced by their children. The UK Understanding Society longitudinal dataset from 2014 to 2024 is utilised, with several varying indicators of financial distress and childhood material deprivation tested. Our panel data analysis shows positive associations between self-employed financial distress and material deprivation as experienced by their children. The children of self-employed individuals who are earning less than the average industrial wage are particularly at risk of experiencing childhood material deprivation. This suggests that financial failure has direct impacts beyond the entrepreneur and support and education should be provided to those small business owners who find themselves in this position. JEL codes: L26, I32, D14, D31, P46