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Title: The Perceived Well-being and Health Costs of Exiting Self-employment
Authors: Nikolova, M.
Nikolaev, B.
Popova, O.
Issue Date: 2021
Publisher: Springer
Springer Science and Business Media LLC
Citation: Nikolova M. The Perceived Well-being and Health Costs of Exiting Self-employment / M. Nikolova, B. Nikolaev, O. Popova // Small Business Economics. — 2021. — Vol. 57. — Iss. 4. — P. 1819-1836.
Abstract: We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimator. We find that while transitioning from self-employment to salaried employment brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job. Meanwhile, leaving self-employment has no consequences for self-reported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are mainly psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even 2 or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the nonmonetary implications of business failure. © 2020, The Author(s).
Keywords: E24
Access: info:eu-repo/semantics/openAccess
SCOPUS ID: 85087512650
PURE ID: 29073862
ISSN: 0921-898X
metadata.dc.description.sponsorship: Popova acknowledges the support from Russian Science Foundation grant no. 19-18-00262.
RSCF project card: 19-18-00262
Appears in Collections:Научные публикации, проиндексированные в SCOPUS и WoS CC

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