Satisfaction and Self-employment: Do Men or Women Benefit More from Being Their Own Boss?
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Satisfaction and Self‑employment: Do Men or Women Benefit More from Being Their Own Boss? Karen Maguire1 · John V. Winters2,3,4
© EEA 2020
Abstract This paper uses individual self-reported life satisfaction data to analyze the relationship between self-employment and subjective well-being by gender and race/ethnicity. We document substantial heterogeneity, with women appearing to benefit the most from self-employment. Self-employed women have significantly higher rates of being very satisfied relative to both traditionally employed women and selfemployed men. We also find that the self-employed have higher rates of dissatisfaction, and this adverse relationship with self-employment is most pronounced for minorities. These nuanced findings broaden our understanding of the relationship between self-employment and subjective well-being and have important implications for both researchers and policymakers. Keywords Well-being · Life satisfaction · Self-employment · Gender · Race JEL Classification I10 · I31 · J2
* Karen Maguire [email protected] John V. Winters [email protected] 1
Department of Economics, Spears School of Business, Oklahoma State University, 352 Business Building, Stillwater, OK 74078, USA
2
Department of Economics, Iowa State University, 460B Heady Hall, Ames, IA 50011‑1054, USA
3 Global Labor Organization (GLO) https://glabor.org/ 4
Institute of Labor Economics (IZA), Bonn, Germany Vol.:(0123456789)
K. Maguire, J. V. Winters
Introduction As the status of entrepreneurs in the USA, such as Mark Zuckerberg and Elon Musk, has increased, so have concerns about a dearth of gender and racial diversity among US entrepreneurs. Recently, the information technology industry in particular has contended with concerns about underrepresentation of women and minority entrepreneurs. This may be due to a lack of financing from venture capitalists, which are predominantly white men, as well as gender differences in competitiveness and risk-taking, or other factors including discrimination (Bönte and Piegeler 2013; Ransom 2011). On the other hand, entrepreneurship and selfemployment may improve the lives of minority individuals relative to traditionally employed workers by allowing them to work outside of the constraints of traditional employment (Hyde-Keller 2016). The extent to which entrepreneurship and self-employment may mitigate or exacerbate gender and racial discrimination and inequality is not clear; however, as women and racial minority groups continue to pursue entrepreneurial opportunities, these issues will become more prominent. In this paper, we examine the benefits to the individual of being self-employed. The data that we use do not distinguish between innovative entrepreneurs and other self-employed workers, so in our analysis we treat all self-employed workers as a single group.1 We use a self-reported subjective well-being (SWB) measure of life satisfaction to consider whether the benefits of self-employment outweigh the costs relative to those who work as a paid emplo
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