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Financial Development, Entrepreneurship, and Job Satisfaction

Milo Bianchi

University of Toulouse 1

September 1, 2010

Review of Economics and Statistics, Forthcoming

This paper shows that utility differences between the self-employed and employees increase with financial development. This effect is not explained by increased profits but by an increased value of non-monetary benefits, in particular job independence. We interpret these findings by building a simple occupational choice model in which financial constraints may impede the creation of firms and depress labor demand, thereby pushing some individuals into self-employment for lack of salaried jobs. In this setting, financial development favors a better matching between individual motivation and occupation, thereby increasing entrepreneurial utility despite increasing competition and so reducing profits.

Number of Pages in PDF File: 33

Keywords: Financial development, entrepreneurship, job satisfaction

JEL Classification: L26, J20, O16

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Date posted: March 14, 2011  

Suggested Citation

Bianchi, Milo, Financial Development, Entrepreneurship, and Job Satisfaction (September 1, 2010). Review of Economics and Statistics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1784979

Contact Information

Milo Bianchi (Contact Author)
University of Toulouse 1 ( email )
Place Anatole France
Toulouse Cedex, F-31042
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