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Life satisfaction and self-employment: a matching approach

journal contribution
posted on 2023-06-08, 12:27 authored by Martin Binder, Alex Coad
Despite lower incomes, the self-employed consistently report higher satisfaction with their jobs. But are self-employed individuals also happier, more satisfied with their lives as a whole? High job satisfaction might cause them to neglect other important domains of life, such that the fulfilling job crowds out other pleasures, leaving the individual on the whole not happier than others. Moreover, self-employment is often chosen to escape unemployment, not for the associated autonomy that seems to account for the high job satisfaction. We apply matching estimators that allow us to better take into account the above-mentioned considerations and construct an appropriate control group (in terms of balanced covariates). Using the BHPS dataset that comprises a large nationally representative sample of the British populace, we find that individuals who move from regular employment into self-employment experience an increase in life satisfaction (up to 2 years later), while individuals moving from unemployment to self-employment are not more satisfied than their counterparts moving from unemployment to regular employment. We argue that these groups correspond to “opportunity” and “necessity” entrepreneurship, respectively. These findings are robust with regard to different measures of subjective well-being as well as choice of matching variables, and also robustness exercises involving “simulated confounders”.

History

Publication status

  • Published

Journal

Small Business Economics

ISSN

0921-898X

Publisher

Springer

Issue

4

Volume

40

Page range

1009-1033

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Notes

Online First Article

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-09-24

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