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Are Self-Employed Happier at Work? Jean-Marc FALTER ∗

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Abstract

According to many work force surveys, a large proportion of workers would like to be their own bosses. Self-employment is supposed to provide greater utility as individuals have the opportunity to set their own schedule, decide when they want to work and perhaps earn large profits. However, the basic self-employment model states that competitive pressure should lower the utility level for the self-employed to a point where only a rent component should give self-employed an extra-satisfaction over employees. Using Swiss data, we find that selfemployed enjoy a greater level of satisfaction from work than employees. However, this greater satisfaction stems rather from job characteristics than from income. Indeed, we find that self-employed are less satisfied with their earnings than employees. The latter result may be evidence either of over-optimism of the self-employed or of a trade-off between freedom and income

Year: 2002
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