Are Senior Entrepreneurs Happier than Who? The Role of Income and Health

49 Pages Posted: 24 Oct 2023

See all articles by Michael Fritsch

Michael Fritsch

Friedrich-Schiller-Universität Jena - School of Economics and Business Administration

Alina Sorgner

Friedrich-Schiller-Universität Jena

Michael Wyrwich

Friedrich-Schiller-Universität Jena

Abstract

We propose an extension of the standard occupational choice model to analyze the life satisfaction of senior entrepreneurs as compared to paid employees and particularly retirees in Germany. The analysis identifies income and health status as main factors that shape the relationship between occupational status and life satisfaction. Senior entrepreneurs enjoy higher levels of life satisfaction than retirees and senior paid employees. This higher life satisfaction is mainly due to their higher income. Physical and mental health play a crucial role in determining both an individual's occupational status and their overall life satisfaction. We find that senior self-employed report to be healthier compared to other groups of elderly individuals. However, when controlling for health, retirees exhibit an even higher level of life satisfaction compared to their self-employed counterparts. Heterogeneity analysis of various types of senior entrepreneurs and senior paid employees confirms this general pattern. In addition, we find some evidence indicating that senior entrepreneurs may compromise their leisure time, a main asset of retired individuals. Implications for research, policy, and practitioners are discussed.

Keywords: senior entrepreneurship, health conditions, well‐being, life satisfaction, age

JEL Classification: L26, I31, J10, D91

Suggested Citation

Fritsch, Michael and Sorgner, Alina and Wyrwich, Michael, Are Senior Entrepreneurs Happier than Who? The Role of Income and Health. IZA Discussion Paper No. 16534, Available at SSRN: https://ssrn.com/abstract=4608790 or http://dx.doi.org/10.2139/ssrn.4608790

Michael Fritsch (Contact Author)

Friedrich-Schiller-Universität Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

Alina Sorgner

Friedrich-Schiller-Universität Jena ( email )

Furstengraben 1
Jena, Thuringa 07743
Germany

Michael Wyrwich

Friedrich-Schiller-Universität Jena ( email )

Furstengraben 1
Jena, Thuringa 07743
Germany

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