Moonlighting and the transition to full-time entrepreneurship

Abstract This paper examines the transition from moonlighting to full-time self-employment using panel data from the Survey of Income and Program Participation. Motivations for moonlighting vary—from financial necessity to entrepreneurial experimentation—and these motivations shape the likelihood of transitioning. The paper finds moonlighters with higher moonlighting income and weaker attachment to their primary job are more likely to become self-employed. Access to employer-provided health insurance inhibits transition, and marriage allows for risk-sharing which promotes entry. Understanding the nuanced pathways from moonlighting to self-employment offers critical insight for designing policies that lower barriers and support entrepreneurial growth.