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Comparative well-being of the self-employed and paid employees in the USA

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  • Panka Bencsik

    (University of Sussex)

  • Tuugi Chuluun

    (Loyola University Maryland)

Abstract

Drawing upon the job demand-control model and analyzing more than 600,000 responses from the nationally representative Gallup survey data over the 2010–2016 period, we find that self-employed individuals in the USA report lower life satisfaction than paid employees (i.e., evaluative well-being). The self-employed also experience both positive feelings such as happiness and enjoyment and negative feelings such as anger and stress more than their wage-earning peers, leading to a stark emotional dichotomy in how they experience their daily lives (i.e., hedonic well-being) consistent with both high job control and high job demand that are prevalent in self-employment. Lastly, the self-employed also report more health problems and lower physical well-being. Income (and low local unemployment to some extent) successfully mitigates the negative effects of self-employment on subjective well-being while enhancing the positive, but education does not do so. Overall, the results suggest that self-employment is associated with predominantly negative well-being effects in the USA.

Suggested Citation

  • Panka Bencsik & Tuugi Chuluun, 2021. "Comparative well-being of the self-employed and paid employees in the USA," Small Business Economics, Springer, vol. 56(1), pages 355-384, January.
  • Handle: RePEc:kap:sbusec:v:56:y:2021:i:1:d:10.1007_s11187-019-00221-1
    DOI: 10.1007/s11187-019-00221-1
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    More about this item

    Keywords

    Subjective well-being; Health; Self-employment; Entrepreneurship; Job demand-control model;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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