Extant evidence that the self-employed overestimate their returns by a greater margin than employees is consistent with two mutually inclusive possibilities. Self-employment may foster optimism or intrinsic optimists may be drawn to self-employment. Previous research is generally unable to disentangle these effects because of reliance on cross-sectional data. Using longitudinal data, this paper finds that employees who will be self-employed in the future overestimate their short-term financial wellbeing by more than those who never become self-employed. Optimism is higher still when self-employed. These results suggest that the greater optimism of the self-employed reflects both psychological disposition and environmental factors. By providing greater scope for optimism, self-employment entices the intrinsically optimistic.
FingerprintDive into the research topics of 'Entrepreneurship: cause and consequence of financial optimism'. Together they form a unique fingerprint.
- Management - Senior Lecturer (Associate Professor)
- Marketing, Business & Society
- Centre for Business, Organisations and Society (CBOS)
Person: Research & Teaching