Optimism, Job Satisfaction and Self-Employment

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Using UK data from 1991 to 2008 this paper investigates whether excessive optimism affects individual level self-employed job satisfaction. Within the context of this paper, excessive optimism refers to the inclination to overestimate the probability of good financial outcomes. Evidence is provided that conditional on self-employed performance, optimism is negatively and significantly associated with self-employed job satisfaction, especially satisfaction with pay. Moreover the detrimental effects of optimism on satisfaction are larger in self-employment than in paid-employment. The results indicate that the higher levels of satisfaction obtained by the self-employed do not result from the self-selection of optimists, suggesting previous studies may underestimate the positive effects of self-employment on utility.
Original languageEnglish
Place of PublicationBath, U. K.
PublisherDepartment of Economics, University of Bath
Publication statusPublished - 15 Apr 2014

Publication series

NameBath Economics Research Working Papers
PublisherDepartment of Economics, University of Bath


  • Optimism
  • self-employment
  • job satisfaction
  • expectations


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