Ebooks for all

Milo Bianchi

Published: 2008

Abstract

This paper explores both theoretically and empirically the relation between financial development and occupational choices, as determined by utility differences between the self-employed and employees. In our model, financial constraints may impede firms' creation and depress labor demand, thereby pushing some individuals into self-employment by lack of salaried jobs. When these constraints are relaxed, instead, more individuals choose self-employment because of their talent. In more financially developed countries, then, the self-employed are more satisfied with their job, even if competition is higher and profits may be lower. Our empirical results support these predictions by showing that greater financial development increases job satisfaction for the self-employed, despite reducing their profits, as it allows them to enjoy greater non-monetary benefits, and in particular higher independence in their job.

Keywords : Financial development, entrepreneurship, job satisfaction.

Free ebook to download in PDF format - 35 pages

• Free ebooks / Economics and Business