Who Truly Thrives in Self-Employment? An Analysis of Gender and Age Effects

This paper investigates differences across age and gender in the well-being derived from self-employment. A novel approach, of using age and gender to understand how self-employment entry impacts distinct well-being domains, is taken. This consideration, along with a large longitudinal sample, unlocks insights for the understanding of the benefits of self-employment entry. Through the implementation of a thorough PSM-DiD approach, four satisfaction measures of life, income, leisure-time and health satisfaction are used to understand the well-being outcomes of 2,895 individuals over 12 years from the UK Household Longitudinal Study. Evidence shows that self-employment entry does impact one’s well-being. Notably, we find that females gain increased well-being benefits in some areas, while constant effects are found across age. We find that self-employment entry results in increases in leisure time and health satisfaction for an individual, but overall life satisfaction remains unchanged. These discoveries provide key implications for policymakers and aspiring self-employed individuals alike. Our findings show that only certain elements of well-being are influenced by entry into self-employment, with greater well-being gained by females regardless of age. This distinction ought to be considered when implementing self-employment policies, where the facilitation of well-being benefits for individuals can increase self-employment rates. The findings also provide prospective business founders with an understanding of the initial well-being impacts of self-employment entry. JEL Classification: L26, J28, J14, J16