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Financial Development, Entrepreneurship, and Job Satisfaction

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  • Milo Bianchi

    (Université Paris-Dauphine)

Abstract

This paper shows that utility differences between the self-employed and employees increase with financial development. This effect is explained not by increased profits but by an increased value of nonmonetary benefits, in particular job independence. We interpret these findings by building a simple occupational choice model in which financial constraints may impede the creation of firms and depress labor demand, thereby pushing some individuals into self-employment for lack of salaried jobs. In this setting, financial development favors a better matching between individual motivation and occupation, thereby increasing entrepreneurial utility despite increasing competition and so reducing profits. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 94 (2012)
Issue (Month): 1 (February)
Pages: 273-286

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Handle: RePEc:tpr:restat:v:94:y:2012:i:1:p:273-286

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Citations

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Cited by:
  1. Schneck, Stefan, 2014. "Why the self-employed are happier: Evidence from 25 European countries," Journal of Business Research, Elsevier, Elsevier, vol. 67(6), pages 1043-1048.
  2. Stefan Schneck, 2012. "Revisiting Procedural Utility: Evidence from European Survey Data," EconStor Preprints, ZBW - German National Library of Economics 57929, ZBW - German National Library of Economics.
  3. Cornelius A. Rietveld & Jolanda Hessels & Peter van der Zwan, 2014. "The Stature of the Self-employed and its Premium," Tinbergen Institute Discussion Papers, Tinbergen Institute 14-109/VII, Tinbergen Institute.
  4. Wietzke, Frank-Borge & McLeod, Catriona, 2013. "Jobs, wellbeing, and social cohesion : evidence from value and perception surveys," Policy Research Working Paper Series, The World Bank 6447, The World Bank.
  5. Andrew E. Clark, 2010. "Work and Well-Being," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 8(4), pages 17-21, 01.

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