خود اشتغالی ناهمگن و رضایتمندی در امریکا لاتین

This paper analyzes the relationship between labor status and individual satisfaction in Latin America. Existing evidence for developed countries shows that the self-employed report higher job satisfaction than the employed. The evidence, however, is less conclusive in terms of life-satisfaction. Moreover, for Latin American countries, the evidence shows that self-employed individuals report lower life-satisfaction than employed individuals do. To clarify the effect of self-employment on satisfaction, we use the Latinobarómetro survey 2007 for eighteen Latin American and Caribbean countries, considering the category self-employment as a heterogeneous category. Additionally, we control for the distinction between necessity and opportunity self-employed. Contrary to existing evidence, we find that not all self-employed individuals are more satisfied than employed individuals. Specifically, we find evidence revealing that, compared to workers in paid employment: (i) self-employed professionals are more satisfied than the employed only with their incomes; (ii) business owners are more satisfied with their lives, income and job; (iii) self-employed famers and fisherman are less satisfied with their jobs and income; and (iv) precarious self-employed workers are as satisfied as the employed with their life but less with job, and for household income results are not conclusive.

According to statistics from the International Labor Office, while self-employed individuals represent around 10% of the working population in developed economies,3 they account for a third4 of the labor force in Latin American and Caribbean (Latin American hereinafter) countries (CEDLAS and The World Bank, 2011 and LABORSTA, 2011) and are increasing rapidly (Tokman, 2009).5 The usual distinction between self-employed and employed individuals is that the former are not subject to a hierarchy (they are their own bosses) despite recognizing that the self-employed are exposed to higher income volatility than wage earners (Shore, 2011). Additionally, as entrepreneurs, the self-employed enjoy a large degree of independence and self-determination at work. Although this description of self-employment applies in developed and less developed countries, there is a specific feature in Latin American countries, namely that self-employment occupations are typically associated to informal employment that goes unreported, leaving the individual unprotected and vulnerable. In terms of the influence of employment status on satisfaction, it is well established that unemployment makes individuals unhappier. Additionally, a rather robust finding is that self-employment is related to higher job satisfaction (see Blanchflower’s studies). However, evidence on a relationship between self-employment and life satisfaction is insufficiently clear (see a survey in Dolan, Peasgood, and White (2008) and Binder and Coad (2012)). Moreover, when considering Latin American countries, the evidence shows that the self-employed are, on average, less satisfied with their life than the employed (see Graham and Felton, 2005 and Graham and Felton, 2006). This large divergence in the results could be due to the fact that these studies assume different categories and types of jobs. That is, at least in Latin American countries, the categories of informality and self-employment are too broad to be conclusive. In the same line, a recent study by Binder and Coad (2012) points out that there is an empirically weak association between satisfaction and self-employment, which can be explained by the fact that the self-employed are quite a heterogeneous group. They consider the heterogeneity in terms of how individuals become self-employed. While some individuals would go into self-employment voluntarily, others who are forced into self-employment might not appreciate the self-employed lifestyle. Therefore, recent literature has incorporated the distinction between necessity entrepreneurship and opportunity entrepreneurship or alternatively the degree of voluntariness in the choice of occupation. We try to contribute to the literature by incorporating another source of heterogeneity to avoid lumping together widely different individuals. We propose a classification of self-employment as a heterogeneous workforce status6 including diverse occupational categories, where such categories are featured in different intensity for the effects associated to the preference for independence or absence of hierarchy, and the existence of risk and instability. In particular, we identify four different occupational types using the Latinobarómetro 2007 dataset: professional, business owner, farmer–fisherman, and street peddler7 own-account workers. As in recent literature, we also seek to control for the distinction between voluntary vs. necessity self-employment (and/or voluntariness). However, our approach differs in that we control for this distinction in each of the occupations. To this end, we consider subjective well-being in different dimensions: life, job and household income satisfaction. The reason for including life satisfaction, aside from the inconclusive existing literature about the effect of self-employment on life-satisfaction – is that life satisfaction is a much more global evaluation of individuals’ well-being, which includes not only job and income satisfaction, but also a set of other interacting factors (Binder and Coad, 2010, Binder and Coad, 2011, Binder and Coad, 2012 and Ferrer-i-Carbonell and Van Praag, 2003). Since individuals might be able to compensate high evaluations in some domains of life with low achievements in others, high job or income satisfaction might be counterbalanced by lower satisfaction in the family domain, social life, etc. The idea behind including income satisfaction – besides the fact that there is no income in our dataset – is the importance of this domain in explaining life satisfaction (Ferrer-i-Carbonell and Van Praag, 2002 and Ferrer-i-Carbonell and Van Praag, 2003). Satisfaction with household income has often been studied in the context of household equivalence scales (see, for example, van Praag & Van der Sar, 1988 or van Praag & Ferrer-i-Carbonell, 2008). Our contribution is, therefore, to first test whether different self-employment occupations have a different influence on satisfaction of self-employed individuals compared to individuals in paid employment. Secondly, we analyze to what extent the results for life, job and household income satisfaction differ. Our findings show the importance of analyzing self-employment as a heterogeneous labor market status, at least in Latin American countries. The main finding is that not all self-employed individuals are less satisfied than employed individuals, as predicted by some of the related literature. Our evidence shows firstly that business owners are more satisfied with life, job and income domains than the employed only when controlling for the degree of freedom to choose and occupation.8 Secondly, self-employed professionals are more satisfied with their income than employed individuals. Third, farmers and fishermen are only less satisfied with job and income if they have reported a higher guarantee of getting a job. Fourth, precarious self-employed individuals are less satisfied with job and income. The dimensions whose estimated parameter is not significantly different from zero could be interpreted as if self-employed are as satisfied as employed. The intuition is that in occupations where the self-employed report either higher or equal subjective well-being as wage earners, the effect of risk and instability dominates the effect of independence and absence of hierarchy, unless there is free will in the choice of occupation for the case of business owner self-employed individuals. In the results section, we also comment on different and alternative explanations. The remainder of this paper proceeds as follows. In the next section, we review the existing literature concerning subjective well-being and self-employment. In Section 3, we present the hypotheses with reference to the determinants of individual subjective well-being. The data and the variables used in the study are described in Section 4. In Section 5, we explain the method of analysis. The results of our analysis are then presented and discussed in Section 6. Finally, Section 7 concludes.

The purpose of this work has been to contribute to the research on the determinants of subjective individual well-being in Latin American and Caribbean countries, with particular attention to the relationship between employment types and satisfaction. To do so, we used the Latinobarómetro survey from the year 2007 and analyzed different subjective measures: life, job and income satisfaction. There are two worthwhile results. First, we find that, compared to employed people, the self-employed do not report different levels of satisfaction. However, this last finding is examined in a deeper way in order to explore the effect of different types of jobs on individuals’ satisfaction. Thus, our second result shows that in Latin American countries self-employed is a heterogeneous category and its effect on life, job and income satisfaction is associated to the sort of self-employment analyzed. Our evidence complements previous literature about Latin American countries (Graham and Felton, 2005, Graham and Felton, 2006, Graham and Pettinato, 2001 and Lora, 2008). We have shown that, for some self-employed, the autonomy and flexibility of their occupation seems to be considered an advantage if they are compared to the employed. This is the case of self-employed professionals and business owners and coincides with the findings of Lora (2008). However, for other categories of self-employment, the economic insecurity and lack of stability associated to precarious jobs prevents individuals from considering their occupation an opportunity for personal growth or a source of satisfaction. This latter evidence goes in line with the findings of Graham and Felton, 2005 and Graham and Felton, 2006 and Graham and Pettinato (2001). We find the most remarkable effects in the income domain. Professionals and business owners are more satisfied than the employed, but it seems that their expectation about income could exceed the actual incomes, reflecting a decrease in their satisfaction. The evidence presented here only provides support for the precariousness effect of self-employment for Latin Americans. However, the effect of different labor market statuses on subjective well-being could be analyzed taking into account the lack of protection and precariousness of some employment and self-employment occupations. There exists considerable heterogeneity within both salaried and self-employed jobs in Latin American countries in terms of pay, hours of work, job security and other job features. Although we could not consider these variables in the analysis presented in this paper, recent studies for developed countries have shown the importance of these factors in self-assessed job satisfaction (Bardasi and Francesconi, 2004, Clark, 2010 and Clark et al., 2010). Although we controlled for a large number of variables, we found that only a few have a statistically significant effect on individuals’ well-being. Future research into the analysis of satisfaction in Latin America would require better sources of information. Recent studies on developed and developing countries, including this one, warn of the need to pay greater attention to labor market heterogeneity in terms of current labor position, procedural dimensions of employment and the individual’s future prospects. As suggested by the Inter-American Development Bank (Lora, 2008), data documenting such characteristics should be collected and taken into account in the design of policies.