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Financial Development, Entrepreneurship, and Job Satisfaction

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  • Milo Bianchi

    ()
    (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine)

Abstract

This paper shows that utility differences between the self-employed and employees increase with financial development. This effect is not explained by increased profits but by an increased value of non-monetary 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.

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Paper provided by HAL in its series Post-Print with number halshs-00670031.

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Date of creation: 2012
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Publication status: Published, Review of Economics and Statistics, 2012, 94, 1, 273-286
Handle: RePEc:hal:journl:halshs-00670031

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Keywords: Financial development; entrepreneurship; job satisfaction;

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Citations

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Cited by:
  1. 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.
  2. Stefan Schneck, 2012. "Revisiting Procedural Utility: Evidence from European Survey Data," EconStor Preprints 57929, ZBW - German National Library of Economics.
  3. 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.
  4. Wietzke, Frank-Borge & McLeod, Catriona, 2013. "Jobs, wellbeing, and social cohesion : evidence from value and perception surveys," Policy Research Working Paper Series 6447, The World Bank.
  5. Cornelius A. Rietveld & Jolanda Hessels & Peter van der Zwan, 2014. "The Stature of the Self-employed and its Premium," Tinbergen Institute Discussion Papers 14-109/VII, Tinbergen Institute.

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