TY - JOUR

T1 - Switching to self-employment can be good for your health

AU - Nikolova, Milena

PY - 2019/7

Y1 - 2019/7

N2 - Relying on theoretical insights from the Job Demand-Control model, which links occupational characteristics to health, this paper provides the first causal evidence of the physical and mental health consequences of self-employment. I utilize German longitudinal data for the period 2002–2014 and difference-in-differences estimations to study switches from unemployment to self-employment (necessity entrepreneurship) and transitions from regular- to self-employment (opportunity entrepreneurship). I find that necessity entrepreneurs experience improvements in their mental but not physical health, while opportunity entrepreneurship leads to both physical and mental health gains. Importantly, the health improvements cannot be explained by changes in income or working conditions and are not driven by personality and risk preferences or the local unemployment conditions. As such, the findings highlight an additional non-monetary benefit of self-employment and have implications for entrepreneurship theory and practice, current and would-be entrepreneurs, as well as policy-makers.

AB - Relying on theoretical insights from the Job Demand-Control model, which links occupational characteristics to health, this paper provides the first causal evidence of the physical and mental health consequences of self-employment. I utilize German longitudinal data for the period 2002–2014 and difference-in-differences estimations to study switches from unemployment to self-employment (necessity entrepreneurship) and transitions from regular- to self-employment (opportunity entrepreneurship). I find that necessity entrepreneurs experience improvements in their mental but not physical health, while opportunity entrepreneurship leads to both physical and mental health gains. Importantly, the health improvements cannot be explained by changes in income or working conditions and are not driven by personality and risk preferences or the local unemployment conditions. As such, the findings highlight an additional non-monetary benefit of self-employment and have implications for entrepreneurship theory and practice, current and would-be entrepreneurs, as well as policy-makers.

KW - Difference-in-differences

KW - Mental health

KW - Physical health

KW - Self-employment

KW - STRESS-RELATED HEALTH

KW - JOB DISPLACEMENT

KW - PHYSICAL HEALTH

KW - MENTAL-HEALTH

KW - ENTREPRENEURSHIP

KW - PERSONALITY

KW - UNEMPLOYMENT

KW - SATISFACTION

KW - WORK

KW - DEMANDS

U2 - 10.1016/j.jbusvent.2018.09.001

DO - 10.1016/j.jbusvent.2018.09.001

M3 - Article

AN - SCOPUS:85053355880

VL - 34

SP - 664

EP - 691

JO - Journal of Business Venturing

JF - Journal of Business Venturing

SN - 0883-9026

IS - 4

ER -