ABSTRACT

There has been a recent growing interest in the relationship between self-employment and life satisfaction. Using an institutional theory lens, in a multilevel model we test the association between shared prosperity and business freedom on life satisfaction reported by self-employed. Specifically, with increasing shared prosperity, self-employed individuals report higher life satisfaction. Furthermore, in countries with higher shared prosperity and greater business freedom, self-employed report a higher life satisfaction. We discuss the implications of our findings and provide future research directions into the link between life satisfaction, institutional factors, and self-employment.

3. Discussion

Satisfaction, a non-pecuniary benefit from self-employment, has been of extensive focus in entrepreneurship research. We replicate prior works on self-employment and life satisfaction, and extend this foundation to include potential country-level institutional influences on this relationship. Our results provide support for the positive relationship between self-employment and life satisfaction. Furthermore, we find that this relationship is strengthened by country-level shared prosperity. Finally, our results suggest that the influence that shared prosperity has on the relationship between self-employment and life satisfaction is enhanced by the level of business freedom present within a specific country.

Interestingly, although our findings are in line with recent research regarding the association between self-employment and life satisfaction (Andersson, 2008; Binder and Coad, 2013), they somewhat contradict evidence that suggests that self-employment could be detrimental to life satisfaction, as a result of the potential for individuals who are self-employed to experience higher levels of work-family conflict (Ford et al., 2007; Parasuraman and Simmers, 2001). These seemingly contradictory findings could point to the inherent subjectivity of determining life satisfaction and well-being in general. Because these concepts rely on subjective comparisons to internally determined standards, it is possible that both results are valid. Perhaps individuals who are self-employed place a lower level of importance on work-family balance as a component to their life satisfaction, which could explain why they could experience both higher levels of work-family conflict and higher levels of life satisfaction. Conversely, it is possible that individuals who are selfemployed expect to experience higher levels of work-family conflict as a result of their occupational choice, and therefore their overall life satisfaction is less likely to be diminished if they do experience such conflicts. Further research employing experimental or quasi-experimental designs could be beneficial in further detailing the nuances of the mechanisms via which self-employment influences life satisfaction.