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Financial development, entrepreneurship and job satisfaction

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  • Milo Bianchi

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

This paper shows that utility differences between the self-employed and the 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 firms' creation 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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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00586059.

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Date of creation: Nov 2008
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Handle: RePEc:hal:psewpa:halshs-00586059

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Keywords: financial development ; entrepreneurship ; job satisfaction;

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References

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Citations

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Cited by:
  1. 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.
  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, vol. 67(6), pages 1043-1048.
  4. Andrew E. Clark, 2010. "Work and Well-Being," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 8(4), pages 17-21, 01.

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