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

Jörn Block (), Miriam Gnad (), Alexander Kritikos and Caroline Stiel
Additional contact information
Jörn Block: University of Trier
Miriam Gnad: University of Trier
Caroline Stiel: DIW Berlin

No 18204, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Despite substantial research on job satisfaction in self-employment, we know little about the consequences for the venture when job satisfaction declines after an external shock. Taking the pandemic as an example of an external shock and drawing on 7,000 self-employed in Germany, we investigate how declines in job satisfaction are related to their investment decisions. Having separated job satisfaction into its financial and non-financial aspects, we build in our analysis on two 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, providing support for the performance feedback perspective. Negative performance, in terms of reduced financial job satisfaction, induces higher search efforts to improve the business situation. Moreover, we 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 narrow the thought-action repertoire, thus hindering resource deployment.

Keywords: behavioral economics; job satisfaction; investment decisions; self-employment and entrepreneurship; performance feedback perspective; broadening-and-build perspective; economic psychology; Germany (search for similar items in EconPapers)
JEL-codes: G11 J28 L26 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-ent, nep-eur and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Applied Psychology, 2025, 74 (6), e70039

Downloads: (external link)
https://docs.iza.org/dp18204.pdf (application/pdf)

Related works:
Working Paper: Decline in Job Satisfaction and How it Relates to Investment Decisions of the Self-Employed (2025)
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:iza:izadps:dp18204

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().