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Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy

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  • Bruno S. Frey
  • Matthias Benz

Abstract

One can be independent, or subject to decisions made by others. This paper empirically tests whether individuals attach an intrinsic value to the institutional difference between independence and hierarchy. Taking self-employment as an important case of independence, it is shown that the self-employed derive more utility from their work than people employed by an organization, irrespective of income gained or hours worked. This is evidence for procedural utility: people do not only value outcomes, but also the conditions and processes leading to these outcomes. Individuals value independence and dislike hierarchy as such, over and above the associated outcomes.

Suggested Citation

  • Bruno S. Frey & Matthias Benz, "undated". "Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy," IEW - Working Papers 135, Institute for Empirical Research in Economics - University of Zurich.
  • Handle: RePEc:zur:iewwpx:135
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    References listed on IDEAS

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    Keywords

    procedural utility; institutions; hierarchy; self-employment; job satisfaction;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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