Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173393
Authors: 
Binder, Martin
Year of Publication: 
2017
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 947
Abstract: 
Despite lower incomes the self-employed often report higher job satisfaction. But this increased job satisfaction only sometimes translates into higher life satisfaction, likely due to the heterogeneous nature of self-employment. By distinguishingdifferent types of self-employment, this paper sheds light onto why some self-employeds even report lower life satisfaction, focussing specifically on poor performance enterprises, a prevalent but disregarded type of entrepreneurship. Using German panel data (1984-2015), I find that self-employment (compared to employment) typically negatively impacts on life satisfaction, especially so if one enters self-employment from unemployment, earns low incomes from self-employment or has no employees. Worries about one's financial situation and job security appear to be the driving forces behind this negative effect. Only very few self-employeds report higher life satisfaction, a boost that seems to relate to the pursuit of entrepreneurial opportunities. In sum, looking at the average self-employed obscures the heterogeneity of well-being impacts resulting from different types of self-employment one might find themselves in, and being on the lower end of the success distribution carries a well-being cost instead of bringing joy.
Subjects: 
subjective well-being
self-employment
entrepreneurial success
SOEP
life satisfaction
JEL: 
I31
L26
J28
Document Type: 
Working Paper

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