Becoming your own boss appears to be good for your health, although your mileage may vary depending on what leads you to strike out on your own, as the effects vary for those moving from unemployment to self-employment and those who leave jobs to work for themselves, new research suggests.
So-called “necessity” entrepreneurs, who emerge from unemployment to establish their own businesses, experience improvements in mental but not in their physical health, according to the study from economist Milena Nikolova, a faculty member at the University of Groningen in the Netherlands.
In contrast, “opportunity” entrepreneurs, who make the transition to self-employment from regular jobs, enjoy both physical and mental health improvements, she found.
“Importantly, the gains cannot be explained by changes in income or working conditions and are not driven by personality and risk preferences or the local unemployment conditions,” she wrote in the Journal of Business Venturing.
“As such, the findings highlight an additional non-monetary benefit of self-employment and have implications for entrepreneurship theory and practice, current and would-be entrepreneurs, as well as policy-makers.”
Nikolova, who studies well-being related to employment, looked at German data from 2012 to 2014. She said her paper provides the first causal evidence of the physical and mental health consequences of self-employment.
Self-employed people with and without employees saw health benefits, according to Nikolova, who noted that numerous other studies show the self-employed enjoy enhanced job satisfaction related to having control over their jobs.
Relatively few studies, however, have explored how entrepreneurship affects physical and mental health, and none looked at the cause and effect, she said.
The study results imply that programs such as grants that encourage entrepreneurship can help improve mental and physical health outcomes in society, according to Nikolova.