Empirically, self-employed persons often operate with the support of their partners or other household members as co-workers in the firm. The formal or informal employment of the marriage partner in particular seems to have a lot of advantages, such as fiscal benefits and low wage costs. But from a theoretical point of view, these advantages are jeopardized by serious cooperation problems: If the spouse of the self-employed decides to work in the jointly-run business, former qualifications are lost. Hence a one-sided dependence on the part of the co-working spouse arises, which increases with the amount of relation-specific investments. Hence the actors are confronted with a cooperation problem, because the decision for co-working requires trust concerning the future action of the self-employed. Within this framework, this paper is focused on the determinants which influence the decisions concerning collaborating in the business of a self employed life’s companion as well as the extent of labor provided in the case of co-working. It can be assumed that the three types of determinants investigated in this paper affect the assignment of a spouse or cohabitation partner in the business of a self-employment person: (1) economic determinants which are individual productivity and human capital of the life’s companion, (2) the situation of the family and the household, and (3) characteristics of the entrepreneur and the firm. Based on a sample of self-employed empirical analysis indicates that trust and specialization play a crucial role in explaining co-working of the life’s companions of self-employed persons. However, economic determinants like productivity and human capital do not show the expected effects on collaboration.

Empirically, self-employed persons often operate with the support of their partners or other household members as co-workers in the firm. The formal or informal employment of the marriage partner in particular seems to have a lot of advantages, such as fiscal benefits and low wage costs. But from a theoretical point of view, these advantages are jeopardized by serious cooperation problems: If the spouse of the self-employed decides to work in the jointly-run business, former qualifications are lost. Hence a one-sided dependence on the part of the co-working spouse arises, which increases with the amount of relation-specific investments. Hence the actors are confronted with a cooperation problem, because the decision for co-working requires trust concerning the future action of the self-employed. Within this framework, this paper is focused on the determinants which influence the decisions concerning collaborating in the business of a self employed life’s companion as well as the extent of labor provided in the case of co-working. It can be assumed that the three types of determinants investigated in this paper affect the assignment of a spouse or cohabitation partner in the business of a self-employment person: (1) economic determinants which are individual productivity and human capital of the life’s companion, (2) the situation of the family and the household, and (3) characteristics of the entrepreneur and the firm. Based on a sample of self-employed empirical analysis indicates that trust and specialization play a crucial role in explaining co-working of the life’s companions of self-employed persons. However, economic determinants like productivity and human capital do not show the expected effects on collaboration.:Introduction; Determinants for co-working of companions; Data and variables; Empirical results; Conclusion