Financial development, entrepreneurship and job satisfaction
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.
|Date of creation:||Nov 2008|
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|Note:||View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00586059|
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- Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
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