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What makes an entrepreneur independent? Evidence from time use survey

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  • Hyytinen, Ari
  • Ruuskanen, Olli-Pekka

Abstract

It is a well-documented empirical regularity that it is more satisfying to be self-employed han to work as an employee for an organization. A large part of this difference in job satisfaction is in the literature attributed to the strong perception of independence by the self-employed. In this paper we study people's time use as a source of entrepreneurial independence. By making use of disaggregated sequential microdata on people's time use, we are able to document that the perceived independence hardly derives from more flexible time use : The self-employed work longer effective hours as well as more in the evenings and weekends than the organizationally employed. Albeit being able to time one's work may be a signal of flexibility in time use, the self-employed have less pure leisure and are less frequently absent from work in general and because of sickness on weekdays in particular. Moreover, we document that the self-employed who have small children are more likely to work after 5 p.m., when the communal day-care centers close. On the basis of these findings it is not surpirising that the selfemployed perceive that they are more often than the organizationally employed under time pressure and in hurry.

Suggested Citation

  • Hyytinen, Ari & Ruuskanen, Olli-Pekka, 2006. "What makes an entrepreneur independent? Evidence from time use survey," Discussion Papers 1029, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1029
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    References listed on IDEAS

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    1. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    2. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    3. Tobias J. Moskowitz & Annette Vissing-Jørgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," American Economic Review, American Economic Association, vol. 92(4), pages 745-778, September.
    4. Klevmarken, Anders, 1998. "Microeconomic Analysis of Time-use Data. Did we reach the promised land?," Working Paper Series 1998:12, Uppsala University, Department of Economics.
    5. 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.
    6. Tobias J. Moskowitz & Annette Vissing-Jorgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," NBER Working Papers 8876, National Bureau of Economic Research, Inc.
    7. Ruuskanen, Olli-Pekka, . "An Econometric Analysis of Time Use in Finnish Households," ETLA A, The Research Institute of the Finnish Economy, number 41.
    8. Biddle, Jeff E & Hamermesh, Daniel S, 1990. "Sleep and the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 922-943, October.
    9. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, December.
    10. Klevmarken, N. Anders, 2005. "Estimates of a labour supply function using alternative measures of hours of work," European Economic Review, Elsevier, vol. 49(1), pages 55-73, January.
    11. 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.
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    Cited by:

    1. Albiol, Judit & Díaz Serrano, Lluís & Teruel, Mercedes, 2014. "Is Self-employment a Way to Escape from Skill Mismatches?," Working Papers 2072/247652, Universitat Rovira i Virgili, Department of Economics.
    2. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Graciela, 2015. "Is Self-employment a Way to Escape from Skill Mismatches?," IZA Discussion Papers 9008, Institute for the Study of Labor (IZA).
    3. 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, pages 651-670.

    More about this item

    Keywords

    entrepreneurship; allocation of time; job satisfaction;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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