Self-employment activity has increased in the United States in recent years, and this
growth has expanded the role of saving by self-employed workers as a source of
funds for investment. A major if not the primary motive for saving by the self-employed is to provide for income during retirement. Retirement saving via Keogh
plans receives preferential tax treatment not unlike that accorded IRAs, yet Keogh
saving behavior has generally been overlooked in econometric research. This article
presents empirical estimates of the determinants of the decision to participate in a
Keogh savings plan and the amount of annual contributions to the plan.
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