The impact of transitions into wage-employment for satisfied and unsatisfied entrepreneurs: A Bayesian analysis
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 3 May 2016
Abstract
Purpose
Should unsatisfied/satisfied entrepreneurs transition into wage-employment? The purpose of this paper is to investigate the financial, physical, social and emotional consequences of the decision.
Design/methodology/approach
The paper uses an Australian, nationally representative panel for two Bayesian multivariate regressions.
Findings
Unsatisfied entrepreneurs that transition from self- to wage-employment improve their income, life and job satisfaction. For satisfied entrepreneurs, continuing or transitioning makes little difference: job and life satisfaction develop similarly. The health of continuing entrepreneurs suffers regardless of whether they are satisfied or unsatisfied.
Research limitations/implications
Unobserved heterogeneity is only addressed within cohorts, not across cohorts. It is possible, that transitioning entrepreneurs are inherently different from continuing entrepreneurs. Further research could include a more fine-grained study of entrepreneurship’s negative health implications or include work-family balance as return to self-employment.
Practical implications
The findings offer clear advice to entrepreneurs that are unsatisfied with their venture: they will likely benefit from transitioning to wage-employment. In addition, it offers a warning to individuals with existing health issues who are considering self-employment.
Originality/value
Academic interest in entrepreneurship exit is growing. This paper is the first to study the financial, physical, social and emotional life consequences of both satisfied and unsatisfied entrepreneurs. It contributes to the discussion of what motivates entrepreneurs to become and remain self-employed.
Keywords
Acknowledgements
This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.
Citation
Mattes, J. (2016), "The impact of transitions into wage-employment for satisfied and unsatisfied entrepreneurs: A Bayesian analysis", International Journal of Entrepreneurial Behavior & Research, Vol. 22 No. 3, pp. 375-397. https://doi.org/10.1108/IJEBR-06-2015-0142
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited