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Financial Development, Entrepreneurship, and Job Satisfaction

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  • Milo Bianchi

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)

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.

Suggested Citation

  • Milo Bianchi, 2012. "Financial Development, Entrepreneurship, and Job Satisfaction," Post-Print hal-01629748, HAL.
  • Handle: RePEc:hal:journl:hal-01629748
    DOI: 10.1162/REST_a_00156
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01629748
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    Cited by:

    1. 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.
    2. Bhuiyan, Muhammad Faress & Ivlevs, Artjoms, 2019. "Micro-entrepreneurship and subjective well-being: Evidence from rural Bangladesh," Journal of Business Venturing, Elsevier, vol. 34(4), pages 625-645.
    3. Peter van der Zwan & Jolanda Hessels & Cornelius A. Rietveld, 2015. "The Pleasures and Pains of Self-Employment: A Panel Data Analysis of Satisfaction with Life, Work, and Leisure," Tinbergen Institute Discussion Papers 15-099/VII, Tinbergen Institute.
    4. Binder, Martin & Blankenberg, Ann-Kathrin, 2021. "Self-employment and Subjective Well-Being," GLO Discussion Paper Series 744, Global Labor Organization (GLO).
    5. van der Zwan, Peter & Hessels, Jolanda & Rietveld, Cornelius A., 2018. "Self-employment and satisfaction with life, work, and leisure," Journal of Economic Psychology, Elsevier, vol. 64(C), pages 73-88.
    6. 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.
    7. José Millán & Jolanda Hessels & Roy Thurik & Rafael Aguado, 2013. "Determinants of job satisfaction: a European comparison of self-employed and paid employees," Small Business Economics, Springer, vol. 40(3), pages 651-670, April.
    8. Karen Maguire & John V. Winters, 2020. "Satisfaction and Self-employment: Do Men or Women Benefit More from Being Their Own Boss?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(4), pages 576-602, October.
    9. Karen Maguire & John V. Winters, 2017. "Satisfaction and Self-Employment: Do Women Benefit More from Being Their Own Boss?," Economics Working Paper Series 1713, Oklahoma State University, Department of Economics and Legal Studies in Business.
    10. Thomas Markussen & Maria Fibæk & Finn Tarp & Nguyen Do Anh Tuan, 2018. "The Happy Farmer: Self-Employment and Subjective Well-Being in Rural Vietnam," Journal of Happiness Studies, Springer, vol. 19(6), pages 1613-1636, August.
    11. Mcleod,Catriona & Wietzke,Frank-Borge, 2013. "Jobs, wellbeing, and social cohesion : evidence from value and perception surveys," Policy Research Working Paper Series 6447, The World Bank.
    12. 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).
    13. Rietveld, Cornelius A. & Hessels, Jolanda & van der Zwan, Peter, 2015. "The stature of the self-employed and its relation with earnings and satisfaction," Economics & Human Biology, Elsevier, vol. 17(C), pages 59-74.
    14. Pham, Tho & Talavera, Oleksandr & Zhang, Mao, 2018. "Self-employment, financial development, and well-being: Evidence from China, Russia, and Ukraine," Journal of Comparative Economics, Elsevier, vol. 46(3), pages 754-769.
    15. 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.
    16. Stefan Schneck, 2012. "Revisiting Procedural Utility: Evidence from European Survey Data," EconStor Preprints 57929, ZBW - Leibniz Information Centre for Economics.
    17. Nabamita Dutta & Russell Sobel, 2016. "Does corruption ever help entrepreneurship?," Small Business Economics, Springer, vol. 47(1), pages 179-199, June.
    18. Andrew E. Clark, 2010. "Work and Well-Being," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(4), pages 17-21, 01.
    19. Suzuki, Aya & Mano, Yukichi & Abebe, Girum, 2018. "Earnings, savings, and job satisfaction in a labor-intensive export sector: Evidence from the cut flower industry in Ethiopia," World Development, Elsevier, vol. 110(C), pages 176-191.
    20. William C. McDowell & Lucy M. Matthews & Ryan L. Matthews & Joshua R. Aaron & Diane R. Edmondson & Cheryl B. Ward, 2019. "The price of success: balancing the effects of entrepreneurial commitment, work-family conflict and emotional exhaustion on job satisfaction," International Entrepreneurship and Management Journal, Springer, vol. 15(4), pages 1179-1192, December.
    21. Karen Maguire & John V. Winters, 0. "Satisfaction and Self-employment: Do Men or Women Benefit More from Being Their Own Boss?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 0, pages 1-27.
    22. Martin Binder & Alex Coad, 2014. "How satisfied are the self-employed? A life domain view," SPRU Working Paper Series 2014-17, SPRU - Science Policy Research Unit, University of Sussex Business School.

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    More about this item

    Keywords

    Financial development; job satisfaction; entrepreneurship;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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