Journal Article

Types of Institutions and Well-Being of Self-Employed and Paid Employees in Europe

Small Business Economics, 56: 877–901

This paper analyzes the role of different types of institutions, such as entrepreneurship-facilitating entry conditions, labor market regulations, quality of government, and perception of corruption for individual well-being among self-employed and paid employed individuals. Well-being is operationalized by job and life satisfaction of individuals in 32 European countries measured by data from EU Statistics on Income and Living Conditions (EU-SILC). We find that institutions never affected both occupational groups in opposite ways. Our findings indicate that labor market institutions do not play an important role for well-being. The results suggest that fostering an entrepreneurial society in Europe is a welfare-enhancing strategy that benefits both, the self-employed and paid employees.


Michael Fritsch
Michael Wyrwich