Reference-dependent preferences in the public and private sectors: A nonlinear perspective

Although existing studies in the strategic management literature examine the importance of reference points in the context of managerial decisions vis-à-vis organizational performance, there is surprisingly little evidence on how reference earnings affect employees' wellbeing and behavior. The present study closes this gap by investigating adaptation dynamics towards reference earnings in the context of employees’ behavioral responses to social comparisons. We argue that a wedge between actual and aspiration-level earnings causes discontent that spurs employees into action to materialize their aspirations. The robustness of such action depends on the size of the wedge in a nonlinear fashion, a hypothesis supported by our findings. Nevertheless, heterogeneity in behavioral responses is evident across the public and private sectors and across gender and educational attainment. Such heterogeneity could be partially attributed to differences in public service motivation among public and private sector employees, to the different weights that employees place on pecuniary vs. non-pecuniary rewards, and whether reference earnings are likely to trigger behavioral responses through a 'jealousy' or through an 'ambition' channel. These findings have implications for the design of strategic human resource management policies to establish reward structures encouraging employees to adopt risk attitudes that are consistent with an overall business strategic plan

Is becoming self-employed a panacea for job satisfaction? Longitudinal evidence from work to self-employment transitions

Using British longitudinal data, we investigate whether individuals enjoy a permanent boost in their job satisfaction by becoming self-employed. We track individuals before and after transitions from work to self-employment and record changes in their job and domain satisfaction scores. We find that job satisfaction follows a rising trajectory immediately upon transition into self-employment and a declining trajectory in subsequent years, as expectations fail to materialize and the novelty of the new venture wanes down. Thus, our findings confirm that job satisfaction gains are not necessarily permanent, suggesting that self-employment is not always a panacea for job satisfaction

From subsistence farming to agribusiness and nonfarm entrepreneurship: Does it improve economic conditions and well-being?

To eradicate poverty, governments across developing countries have adopted programs to promote business ownership, with varying levels of success. The mixed success of such programs underscores the importance of local business and economic conditions. Yet, empirical evidence on how local context shapes outcomes of entrepreneurship-focused poverty initiatives is sparse. In this paper, we use data from the 2015 Smallholder Survey to examine the impact of farming as a business (agribusiness) and nonfarm entrepreneurship (NFE) on household income and economic well-being in Uganda. We find that, in comparison to subsistence farming, engaging in agribusiness and NFE boosts household income and economic well-being, especially in rural areas with high poverty rates. Our research contributes to the literature by offering new evidence on the efficacy of entrepreneurial initiatives in the specific context of a developing country with a large rural and agricultural economy. In terms of policy, our analysis provides support for the promotion of agribusiness and NFE initiatives to reduce poverty and overcome disparities between urban and rural settings

The Emerging Aversion to Inequality: Evidence from Poland 1992-2005

This paper provides an illustration of the changing tolerance for inequality in a context of radical political and economic transformation and rapid economic growth. We focus on the Polish experience of transition and explore self-declared attitudes of the citizens. Using monthly representative surveys of the population, realized by the Polish poll institute (CBOS) from 1992 to 2005, we identify a structural break in the relation between income inequality and subjective evaluation of well-being. The downturn in the tolerance for inequality (1997) coincides with the increasing distrust of political elites.http://deepblue.lib.umich.edu/bitstream/2027.42/64387/1/wp919.pd

Public health insurance and entry into self-employment

We estimate the impact of a differential treatment of paid employees versus self-employed workers in a public health insurance system on the entry rate into entrepreneurship. In Germany, the public health insurance system is mandatory for most paid employees, but not for the selfemployed, who usually buy private health insurance. Private health insurance contributions are relatively low for the young and healthy, and until 2013 also for males, but less attractive at the other ends of these dimensions and if membership in the public health insurance allows other family members to be covered by contribution-free family insurance. Therefore, the health insurance system can create incentives or disincentives to starting up a business depending on the family’s situation and health. We estimate a discrete time hazard rate model of entrepreneurial entry based on representative household panel data for Germany, which include personal health information, and we account for non- random sample selection. We estimate that an increase in the health insurance cost differential between self-employed workers and paid employees by 100 euro per month decreases the annual probability of entry into selfemployment by 0.38 percentage points, i.e. about a third of the average annual entry rate. The results show that the phenomenon of entrepreneurship lock, which an emerging literature describes for the system of employer provided health insurance in the USA, can also occur in a public health insurance system. Therefore, entrepreneurial activity should be taken into account when discussing potential health care reforms, not only in the USA and in Germany

The effect of autonomy, training opportunities, age and salaries on job satisfaction in the South East Asian retail petroleum industry

South East Asian petroleum retailers are under considerable pressure to improve service quality by reducing turnover. An empirical methodology from this industry determined the extent to which job characteristics, training opportunities, age and salary influenced the level of job satisfaction, an indicator of turnover. Responses are reported on a random sample of 165 site employees (a 68% response rate) of a Singaporean retail petroleum firm. A restricted multivariate regression model of autonomy and training opportunities explained the majority (35.4%) of the variability of job satisfaction. Age did not moderate these relationships, except for employees >21 years of age, who reported enhanced job satisfaction with additional salary. Human Capital theory, Life Cycle theory and Job Enrichment theory are invoked and explored in the context of these findings in the South East Asian retail petroleum industry. In the South East Asian retail petroleum industry, jobs providing employees with the opportunity to undertake a variety of tasks that enhanced the experienced meaningfulness of work are likely to promote job satisfaction, reduce turnover and increase the quality of service