Nikolova, Milena and Nikolaev, Boris and Popova, Olga (2020) The perceived well-being and health costs of exiting self-employment. SMALL BUSINESS ECONOMICS. ISSN 0921-898X, 1573-0913
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We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimator. We find that while transitioning from self-employment to salaried employment brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job. Meanwhile, leaving self-employment has no consequences for self-reported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are mainly psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even 2 or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the nonmonetary implications of business failure.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | JOB-SATISFACTION; BUSINESS FAILURE; LIFE SATISFACTION; UNEMPLOYMENT; ENTREPRENEURS; ADAPTATION; EXPERIENCE; HAPPINESS; FOUNDERS; PANEL; Entrepreneurship; Self-employment; Health; Well-being; Unemployment; Job switches |
| Subjects: | 300 Social sciences > 330 Economics 600 Technology > 610 Medical sciences Medicine |
| Divisions: | Institute for East and Southeast European Studies (IESES) |
| Depositing User: | Petra Gürster |
| Date Deposited: | 14 Apr 2021 07:42 |
| Last Modified: | 14 Apr 2021 07:42 |
| URI: | https://pred.uni-regensburg.de/id/eprint/44240 |
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