IDEAS home Printed from
   My bibliography  Save this article

Does self-employment contribute to national happiness?


  • Harbi, Sana El
  • Grolleau, Gilles


Recent studies showed that self-employment impacts individual happiness either positively or negatively. Rather than considering the happiness effects at the individual level, we assess whether self-employment effects spread and impact the domestic happiness beyond the involved individuals. We distinguish a direct effect of self-employment on life satisfaction and an indirect effect through the impact of self-employment on per capita income and the subsequent impact of income on life satisfaction. Using panel data analysis for 15 OECD countries over a period of 18 years, we investigate empirically whether countries with higher levels of self-employment are happier, by disentangling the two previously mentioned effects. We remedy the potential endogeneity problem when estimating the indirect effect by instrumenting the self-employment rate. The main finding is a significant and negative direct effect which is larger in magnitude than the indirect effect, resulting in an overall negative effect of self-employment on the domestic happiness.

Suggested Citation

  • Harbi, Sana El & Grolleau, Gilles, 2012. "Does self-employment contribute to national happiness?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 670-676.
  • Handle: RePEc:eee:soceco:v:41:y:2012:i:5:p:670-676 DOI: 10.1016/j.socec.2012.06.001

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    2. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    3. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
    4. Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
    5. Isabel Grilo & Roy Thurik, 2008. "Determinants of entrepreneurial engagement levels in Europe and the US," Industrial and Corporate Change, Oxford University Press, vol. 17(6), pages 1113-1145, December.
    6. Carol Graham & Stefano Pettinato, 2001. "Happiness, Markets, and Democracy: Latin America in Comparative Perspective," Journal of Happiness Studies, Springer, vol. 2(3), pages 237-268, September.
    7. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    8. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
    9. Joern Block & Philipp Koellinger, 2009. "I Can't Get No Satisfaction-Necessity Entrepreneurship and Procedural Utility," Kyklos, Wiley Blackwell, vol. 62(2), pages 191-209, April.
    10. Zoltan Acs, 2006. "How Is Entrepreneurship Good for Economic Growth?," Innovations: Technology, Governance, Globalization, MIT Press, vol. 1(1), pages 97-107, March.
    11. Wolfers, Justin, 2003. "Is Business Cycle Volatility Costly? Evidence from Surveys of Subjective Well-Being," International Finance, Wiley Blackwell, vol. 6(1), pages 1-26, Spring.
    12. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    13. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    14. Clark, Andrew E. & Oswald, Andrew J., 1996. "Satisfaction and comparison income," Journal of Public Economics, Elsevier, vol. 61(3), pages 359-381, September.
    15. Thomas Bulmahn, 2000. "Modernity and Happiness – The Case of Germany," Journal of Happiness Studies, Springer, vol. 1(3), pages 375-399, September.
    16. Andersson, Pernilla, 2008. "Happiness and health: Well-being among the self-employed," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 213-236, February.
    17. Bulmahn, Thomas, 2000. "Modernity and happiness: The case of Germany," Discussion Papers, Research Unit: Social Structure and Social Reporting FS III 00-402, Social Science Research Center Berlin (WZB).
    18. Andrew J. Oswald & Nattavudh Powdthavee, 2008. "Death, Happiness, and the Calculation of Compensatory Damages," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 217-251, June.
    19. Thomas Lange, 2012. "Job satisfaction and self-employment: autonomy or personality?," Small Business Economics, Springer, vol. 38(2), pages 165-177, February.
    20. Sen, Amartya, 1988. "Freedom of choice : Concept and content," European Economic Review, Elsevier, vol. 32(2-3), pages 269-294, March.
    21. Matthias Benz & Bruno S. Frey, 2008. "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," Economica, London School of Economics and Political Science, vol. 75(298), pages 362-383, May.
    22. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    23. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Martin Binder, 2017. "Entrepreneurial Success and Subjective Well-Being: Worries about the Business Explain One's Well-Being Loss from Self-Employment," SOEPpapers on Multidisciplinary Panel Data Research 947, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Martin Binder & Alex Coad, 2016. "How Satisfied are the Self-Employed? A Life Domain View," Journal of Happiness Studies, Springer, vol. 17(4), pages 1409-1433, August.

    More about this item


    Self-employment; Life satisfaction; Panel data;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceco:v:41:y:2012:i:5:p:670-676. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.