Decline in Job Satisfaction and How it Relates to Investment Decisions of the Self-Employed

Joern Block, Miriam Gnad, Alexander S. Kritikos and Caroline Stiel

No 2142, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Despite substantial research on job satisfaction in self-employment, we know little about the specific consequences for the venture when job satisfaction declines after an external shock. Taking the COVID-19 pandemic as an example of an external shock and drawing on a sample of nearly 7,000 self-employed individuals living in Germany, we investigate how declines in job satisfaction are related to investment decisions of self-employed individuals. Having separated job satisfaction into its financial and non-financial aspects, we build in our analysis on two complementary behavioral perspectives to predict how reductions in financial and non-financial job satisfaction relate to investments in venture development. Our results show that decreasing financial job satisfaction is positively related to time investments. This finding provides support for the performance feedback perspective, where negative performance, in terms of reduced financial job satisfaction, induces higher search efforts to improve the business situation. Moreover, we also observe that reductions in non-financial job satisfaction are negatively associated with both time and monetary investments. This supports the broadening-and-build perspective in that negative experiences – in the form of reduced non-financial job satisfaction – narrow the thought-action repertoire, thus hindering resource deployment. Implications of reduced job satisfaction on investment behavior are discussed.

Keywords: Job satisfaction; investment decisions; self-employment and entrepreneurship; performance feedback perspective; broadening-and-build perspective; behavioral economics; economic psychology; Germany (search for similar items in EconPapers)
JEL-codes: G11 J28 L26 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2025
New Economics Papers: this item is included in nep-eur
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.981924.de/dp2142.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp2142

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().