employed who choose to contribute to the pension system are significantly more patient, however, contrary to expectations, those who contribute are also more tolerant of risk. These findings motivate a separate set of regressions on the sample of self employed, in particular to see whether the time and risk preference variables remain significant after a wider selection of "demand" variables from the PRIESO are included in the analysis.

Of the 186 self employed men of working age in the PRIESO sample, 40 (22%) were contributing to the pension system. A tobit regression on contribution density for the sample of self employed men, presented in Table 11, roughly mirrors the results of the regressions in Table 8 on the entire male sample.<sup>57</sup> After controlling for age and position in the household, education has a positive and significant (5% level) effect on contribution density. As in the earlier regressions, self employed respondents who entered the labor market prior to the 1981 reform have significantly (5% level) lower density of contributions. Those who sought credit in the previous year but failed to get a loan also had significantly (5% level) lower contribution densities.<sup>5 8</sup> The amount of money received by the household in contributory retirement benefits increases contribution density. As in the earlier tobit regression, the log of imputed rent significantly (10% level) lowers contribution density, affirming the earlier finding that savings in the form of housing is perceived as an alternative retirement security instrument to the pension system. Finally, the self employed who expect to live longer contribute to the pension system for a greater share of their working lives.

Including the time and risk preference variables (TIMEPRF and RISKPRF) in the model, although on a smaller sample size, significantly alters the results.<sup>59</sup> A cubic polynomial on AGE, similar to that in the tobit for the entire male sample, is preferred. However, the negative coefficient on PAYGREG is no longer significant. Nor is the coefficient on credit constraints or on the log of imputed rent. The self employed with greater patience and an aversion to risk have a greater contribution density. While this last result may seem at first glance to contradict the findings in Barr and Packard (2002), since the average age of the sample of self employed men (40) is higher than that of the sample of wage and salaried employees (36), a larger share of their contribution density consists of contributions to the PAYGO system prior to the introduction of individual accounts in 1981, and thus to a formal pooling instrument that is less risky to the individual by design. That the time and risk preference variables render the coefficient on PAYGREG insignificant, supports this interpretation.

The results of probits estimating the probability of contribution among self employed men, are presented in Tables 12 and 13. Table 12 presents the results of the model first 57 There are an insufficient number of women of working age in self employment to allow a separate analysis of male and female entrepreneurs.

58 The earlier concern for and caution about the possible endogeneity of this variable applies.

**59** The time and risk preference data was only collected from a sub-sample of 230 PRIESO respondents. Running the regression on the smaller sample without the preference variables does not alter the results shown in the first columns of Table 8.1 1.

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