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Financial Development, Entrepreneurship, and Job Satisfaction

  • Milo Bianchi

    ()

    (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine)

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.

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Paper provided by HAL in its series Post-Print with number halshs-00670031.

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Date of creation: 2012
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Publication status: Published, Review of Economics and Statistics, 2012, 94, 1, 273-286
Handle: RePEc:hal:journl:halshs-00670031
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00670031
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