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The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees

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  • Arndt Werner
  • Johanna Gast
  • Sascha Kraus

Abstract

To date, little is known about how working time preferences and fair wage perceptions affect employees’ entrepreneurial intentions. Using data from the German Socio-Economic Panel Study, we provide first evidence that the difference between the actual and desired amount of working hours in paid employment is positively related to the propensity to switch to self-employment. Furthermore, our analysis supports the hypothesis that employees who perceive their current wage level as very unfair are more likely to have higher entrepreneurial intentions. However, the closer actual wages get to the wage levels perceived as fair, the more employees are likely to remain in their current employment situation. We also tested the interaction effect of working time preferences and fair wage perceptions. In line with our theoretical considerations, we find that employees who perceive their wages as unfair and, simultaneously, prefer different work hours have the strongest entrepreneurial intentions. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.
    • Handle: RePEc:kap:sbusec:v:43:y:2014:i:1:p:137-160
    DOI: 10.1007/s11187-013-9528-2
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    More about this item

    Keywords

    Employee entrepreneurship; Entrepreneurial intentions; Reference points; Working time preferences; J3; J24; J28; L26;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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