An academic study released in the United Kingdom called “Life Satisfaction and Self-Employment” uses a unique research approach to demonstrate that those who choose to be self-employed enjoy more overall satisfaction, not only with their jobs but also with their lives as a whole. This trend seems to occur even when the self-employed person’s income is lower than it would otherwise be in a traditional business environment. The paper looks primarily at the periods of transition into self-employment, or nascent entrepreneurship (rather than at individuals who have been self-employed for many years).
In terms of job satisfaction, there have been many prior studies that have demonstrated that self-employed workers tend to be happier with their jobs overall than their traditionally employed counterparts. However, what’s new in this study is that the authors manage to identify a link between self-employment and overall life satisfaction and happiness as well. In fact, within the paper the authors posit that individuals who leave regular employment roles to pursue self-employment opportunities experience an increase in overall life fulfillment up to two years later.
Furthermore, this study shows that there is a distinct difference between people who choose and pursue self-employment on their own terms (called “opportunity entrepreneurs”) and those who become self-employed due to the circumstances of life, such as illness, disability, or unemployment (“necessity entrepreneurs”). Basically, it is the opportunity entrepreneurs who experience the boost in happiness; necessity entrepreneurs experience around the same level of work and life fulfillment as those who are traditionally employed. Thus, it seems that choice is an important factor in determining the level of self-employment satisfaction and success.
In their study, the authors employed a unique approach to the research. Drawing from a BHPS data set that comprised a large nationally representative sample of the British population, they constructed an appropriate control group (with annual responses recorded for the period 1996–2006) to be able to look at this correlation between work modality and life satisfaction.
Binder, Martin, and Coad, Alex. “Life Satisfaction and Self-Employment: A Matching Approach.” Papers on Economics and Evolution. n.d. (6/1/13.)
Small Business Labs. “Self-Employed Happier with Lives Than Employees.” SmallBizLabs.com. 5/28/13.