What The Research Says
- A large portion (35%) of self employed individuals work in construction, and services (repair & maintenance, personal & laundry services, religious and civic organizations, and private households).
- There is significant volatility in self employment and small business salaries in aggregate.
- Self employed individuals appear to be “happier” (subjective well being) regardless of income and salary, and have significantly higher levels of job satisfaction.
- The median income of the self employed is at or below the median income of the employed depending on the data.
- Self employed individuals report more stress than employed individuals, which might relate to worse health outcomes; however, studies are torn as to whether the positive mental health benefits of entrepreneurship counter the risks from increased stress.
- Unemployment is significantly negatively associated with reduced life satisfaction, especially in rich countries (e.g. USA)
References
- Being Independent is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy (University of Zurich)
- Are Self-Employed Really Happier Than Employees? (German Socio-Economic Panel)
- Statistics about Business Size (Census)
- The Job Satisfaction Paradox for the Self Employed (BusinessWeek)
- Take This Job and Love It (PEW Research)
- Self-employment in the United States (BLS)
- HEALTH ASSESSMENT AND HEALTH AMONG THE SELF-EMPLOYED (DRUID Academy)
- Well Being Evidence for Policy (NEF)
The Choices
Student – You are in school and plan on staying there as long as your growing student loans and parent’s pocketbooks hold out.
Score: No Change
Unemployed – Regardless of cause, you have unfortunately found yourself outside of school and sans means of consistently paying for conveniences like iPhones, European vacations and food.
Score: +1 Risk, -1 Wealth, -1 Happiness
Employee – You work inside a 10 x 10 space with people you can barely stand and each night you pray for a quick and painless death, but at least you have health benefits.
Score: No Change
Self Employed – You decided to be your own boss, and find it strange that you still can’t get a raise.
Score: +1 Risk, +1 Happiness