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Financial development, entrepreneurship and job satisfaction

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  • Milo Bianchi

    () (PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Abstract

This paper shows that utility differences between the self-employed and the 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 firms' creation 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, 2008. "Financial development, entrepreneurship and job satisfaction," PSE Working Papers halshs-00586059, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00586059
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00586059
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    References listed on IDEAS

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    Citations

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    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. 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.
    3. 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.
    4. 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.
    5. repec:eee:joepsy:v:64:y:2018:i:c:p:73-88 is not listed on IDEAS
    6. 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.
    7. 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.
    8. Stefan Schneck, 2012. "Revisiting Procedural Utility: Evidence from European Survey Data," EconStor Preprints 57929, ZBW - German National Library of Economics.
    9. Nabamita Dutta & Russell Sobel, 2016. "Does corruption ever help entrepreneurship?," Small Business Economics, Springer, vol. 47(1), pages 179-199, June.
    10. 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.
    11. 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.
    12. Tho Pham & Oleksandr Talavera & Mao Zhang, 2018. "Self-employment, financial development and well-being: Evidence from China, Russia and Ukraine," Working Papers 2018-03, Swansea University, School of Management.
    13. 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.

    More about this item

    Keywords

    financial development; entrepreneurship; job satisfaction;

    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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