The role of transitory events in shaping subjective well-being among the self-employed: Finland’s tax day effect

Drawing on relative deprivation theory and adaptation theory, this study examines how Finland’s annual tax day, which publicly discloses citizens’ taxable income, affects the subjective well-being of self-employed individuals across income levels. Utilizing a regression discontinuity design with European Social Survey data, we analyze well-being before and after this transitory event. Our findings reveal asymmetric effects: low-income self-employed individuals experience significant negative impacts on well-being, while high-income self-employed and wage earners show negligible effects. The results demonstrate how institutionalized income transparency somewhat disrupts adaptation processes and intensifies unfavorable social comparisons, particularly for lower-income entrepreneurs. These results highlight the need to consider the stability of the self-employment-wellbeing relationship and highlight certain entrepreneurial subgroups’ vulnerability to external informational shocks.