Financial Development, Entrepreneurship, and Job Satisfaction

Milo Bianchi (1)

1 DRM - Dauphine Recherches en Management

This paper shows that utility differences between the self-employed and employees increase with financial development. This effect is not explained by increased profits but by an increased value of non-monetary benefits, in particular job independence. We interpret these findings by building a simple occupational choice model in which financial constraints may impede the creation of firms and depress labor demand, thereby pushing some individuals into self-employment for lack of salaried jobs. In this setting, financial development favors a better matching between individual motivation and occupation, thereby increasing entrepreneurial utility despite increasing competition and so reducing profits.

Mots clés: Financial development; entrepreneurship; job satisfaction

Domaines: Economies et finances

Milo Bianchi. Financial Development, Entrepreneurship, and Job Satisfaction. Review of Economics and Statistics, 2012, 94 (1), pp.273-286. ⟨halshs-00670031⟩