Overoptimistic entrepreneurs : predicting wellbeing consequences of self-employment / Reto Odermatt (University of Basel and CEP (LSE)), Nattavudh Powdthavee (Warwick Business School, CEP (LSE) and IZA), Alois Stutzer (University of Basel and IZA) ; IZA Institute of Labor Economics
VerfasserOdermatt, Reto ; Powdthavee, Nattavudh ; Stutzer, Alois
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, October 2017
Elektronische Ressource
Umfang1 Online-Ressource (35 Seiten) : Diagramme
SerieDiscussion paper ; no. 11098
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Overoptimistic entrepreneurs [1.26 mb]
Verfügbarkeit In meiner Bibliothek

The formation of expectations is a fundamental part of the process when people decide about engaging in an entrepreneurial venture. We evaluate the accuracy of newly selfemployed people's predictions of their overall future wellbeing. Based on individual panel data for Germany, we find that they are overly optimistic when we compare their predicted life satisfaction with their actual life satisfaction five years later on. This overoptimism also holds for those entrepreneurs who successfully remain in business for at least five years. A possible reason might be that they underestimate the heavy workload reflected in higher working hours than desired and the drop in leisure satisfaction.