Self-employment and well-beingnew insights on heterogeneity, satisfaction, and health

Abstract

Is entrepreneurship a good work alternative in terms of individual well-being? How is the well- being of entrepreneurs compared to that of employees? Does individual well-being determine the prolongation of the entrepreneur’s working life? Despite the increasing international attention that the issue of individual well-being is receiving in both the political and academic arenas, these and other questions still lack an answer. Choosing Europe as the research scenario, this thesis aims to solve these questions to offer more arguments that enrich the current literature on well-being and entrepreneurship, while being useful both for individuals who are or want to become entrepreneurs and for future political reforms of entrepreneurship. The first essay uses data from the European Community Household Panel to examine the change in satisfaction with the main activity of inactive individuals who transition to self-employment compared to those who become paid employees and those who remain inactive. Incorporating inactive individuals into the workforce could generate significant economic and social benefits. Despite the fact that inactivity is made up of very heterogeneous individuals, self-employment could be a very attractive occupational alternative for them, thanks to the nonpecuniary benefits it offers. The estimates point to a positive association between satisfaction with the main activity of inactive individuals and entry into self-employment. In addition, specific analyses are performed for the different profiles of inactive people in order to draw more exhaustive and detailed conclusions. This work may be relevant to policies that seek employment opportunities for inactive individuals, while improving their welfare. The second study echoes government programs focused on reducing the widespread problems of mental health and considers the workplace as the main context to analyze. Therefore, the objective of this work is to make an in-depth comparison of the mental health of self-employed and paid workers, distinguishing between two main types of self-employment (necessity and opportunity self- employment). Using the European Working Conditions Survey, results from the analysis confirm the existence of differences between the two groups of workers. Additionally, moderation-based analyses are used to find out the influence of nonpecuniary benefits from self-employment on the main results. The findings of this study contribute to the literature on entrepreneurship and mental health, while also being of particular relevance for policy makers in these areas. The last chapter studies an issue of great concern in Europe: retirement. In recent years, the debate has focused mainly on raising the mandatory age of retirement. However, a widespread trend has recently arisen among Western governments aimed at encouraging individuals to voluntarily discard early retirement. In this context, although many academics have studied paid employees in terms of their retirement behavior, little is known as to the retirement behavior of the self-employed. The goal of this chapter is to shed light on this research gap. Thus, using the Survey on Health, Aging and Retirement in Europe, it analyzes and compares the probability of early retirement for both paid employees and self-employed workers. In addition, it tests the moderating effect of well-being on that probability. The results indicate that the self-employed are less likely to retire early as compared to paid employees. These findings, besides contributing to the extant literature, have meaningful implications for designing policy-makers aimed at extending working life.