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Never the same after the first time: The satisfaction of the second-generation self-employed

  • Andrew E. Clark

    (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, IZA - Institute for the Study of Labor - IZA, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC))

  • Nathalie Colombier

    (CREM - Centre de Recherche en Economie et Management - CNRS - Centre National de la Recherche Scientifique - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1)

  • David Masclet

    (CREM - Centre de Recherche en Economie et Management - CNRS - Centre National de la Recherche Scientifique - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1, CIRAMO - CIRAMO)

Previous empirical work has shown that the self-employed are generally more satisfied than salaried workers. This paper contributes to the existing literature in two ways. First, using French data from the ECHP and British data from the BHPS, we investigate the domains over which this differential operates. We show that, after controlling for occupation, self-employed workers are generally more satisfied with working conditions and pay, but less satisfied than employees with respect to job security. We then consider the differences between the first- and second-generation self-employed. The first-generation self-employed (those whose parents were not self-employed) are more satisfied overall than are the second-generation self-employed. We argue that this finding is consistent with the self-employed partly comparing their labor market outcomes with those of their parents, as well as parental transfers which loosen the self-employment participation constraint. This result is found in both pooled and panel analysis.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00586826.

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Date of creation: Mar 2008
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Handle: RePEc:hal:psewpa:halshs-00586826
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  1. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, 1.
  2. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles," Post-Print halshs-00754299, HAL.
  3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  4. Andrew E. Clark & Claudia Senik, 2004. "The (unexpected) structure of "rents" on the French and British labour markets," DELTA Working Papers 2004-06, DELTA (Ecole normale supérieure).
  5. Lindh, Thomas & Ohlsson, Henry, 1998. "Self-Employment and Wealth Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 25-42, March.
  6. Clark, Andrew E., 1997. "Job satisfaction and gender: Why are women so happy at work?," Labour Economics, Elsevier, vol. 4(4), pages 341-372, December.
  7. repec:prs:ecoprv:ecop_0249-4744_1995_num_121_5_5769 is not listed on IDEAS
  8. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  9. Olivier Marchand, 1998. "Salariat et non-salariat dans une perspective historique," Économie et Statistique, Programme National Persée, vol. 319(1), pages 3-11.
  10. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
  11. Kaufmann, Patrick J., 1999. "Franchising and the choice of self-employment," Journal of Business Venturing, Elsevier, vol. 14(4), pages 345-362, July.
  12. Edward P. Lazear & Robert L. Moore, 1984. "Incentives, Productivity, and Labor Contracts," The Quarterly Journal of Economics, Oxford University Press, vol. 99(2), pages 275-296.
  13. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  14. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
  15. Carrington, William J & McCue, Kristin & Pierce, Brooks, 1996. "The Role of Employer-Employee Interactions in Labor Market Cycles: Evidence from the Self-Employed," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 571-602, October.
  16. Clark, Andrew E. & Oswald, Andrew J. & Warr, Peter B., 1994. "Is job satisfaction u-shaped in age ?," CEPREMAP Working Papers (Couverture Orange) 9407, CEPREMAP.
  17. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  18. Stefan Boes & Kevin Staub & Rainer Winkelmann, 2007. "Hedonic Adaptation to Living Standards and the Hidden Cost of Parental Income," SOI - Working Papers 0713, Socioeconomic Institute - University of Zurich.
  19. Nathalie Colombier & David Masclet, 2006. "Self-Employment and The Intergenerational Transmission of Human Capital," CIRANO Working Papers 2006s-19, CIRANO.
  20. Taylor, Mark P, 1996. "Earnings, Independence or Unemployment: Why Become Self-Employed?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 253-66, May.
  21. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  22. Carroll, Glenn R. & Mosakowski, Elaine M., 1987. "The Career Dynamics of Self-Employment," Institute for Research on Labor and Employment, Working Paper Series qt13p1n10b, Institute of Industrial Relations, UC Berkeley.
  23. Sousa-Poza, Alfonso & Sousa-Poza, Andres A, 2000. "Taking Another Look at the Gender/Job-Satisfaction Paradox," Kyklos, Wiley Blackwell, vol. 53(2), pages 135-52.
  24. Andrew Clark, 1995. "L'utilité est-elle relative ? Analyse à l'aide de données sur les ménages," Économie et Prévision, Programme National Persée, vol. 121(5), pages 151-164.
  25. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
  26. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  27. Bernard F. Lentz & David N. Laband, 1990. "Entrepreneurial Success and Occupational Inheritance among Proprietors," Canadian Journal of Economics, Canadian Economics Association, vol. 23(3), pages 563-79, August.
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