Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1243: Well-being Effects of Self-employment: A Spatial Inquiry

Maria Abreu , Özge Öner (), Aleid Brouwer and Eveline van Leeuwen
Additional contact information
Maria Abreu: University of Cambridge, Postal: Department of Land Economy and Pembroke College
Özge Öner: University of Cambridge, Department of Land Economy, Postal: and Research Institute of Industrial Economics, Stockholm, and Centre for Entrepreneurship and Spatial Economics, Jönköping,
Aleid Brouwer: University of Groningen, Postal: Faculty of Spatial Sciences, Groningen, and NHL Stenden University of Applied Sciences, Academy International Business Administration, Leeuwarden
Eveline van Leeuwen: Urban Economics Group, Postal: Wageningen University

Abstract: Our paper presents an empirical analysis of entrepreneurial well-being using a large-scale longitudinal household survey from the UK that tracks almost 50,000 individuals across seven waves over the period 2009–2017, as well as a number of exploratory case studies. We contribute to the existing literature by investigating how entrepreneurial well-being varies across locations along the urban-rural continuum, and across wealthy-deprived neighbourhoods. We use a Coarsened Exact Matching (CEM) approach to compare the well-being outcomes of individuals who switch into self-employment from waged employment, and show that entrepreneurial well-being, in the form of job satisfaction, is significantly higher for those living in semi-urban locations, relative to those living in urban and rural locations. We argue that semi-urban locations provide an optimal combination of ease of doing business and quality of life. Our results also show that individuals in wealthy neighbourhoods who switch into self-employment experience higher job satisfaction than otherwise comparable individuals living in materially deprived neighbourhoods, although the latter experience greater levels of life satisfaction following the switch.

Keywords: Entrepreneurship; Well-being; Self-employment; Urban-rural; Neighbourhood effects

JEL-codes: E24; I13; L26; P25; R20; R23

46 pages, October 30, 2018

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