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Hidden costs of entering self-employment: the spouse’s psychological well-being

Author

Listed:
  • Safiya Mukhtar Alshibani

    (Princess Nourah Bint Abdulrahman University)

  • Ingebjørg Kristoffersen

    (The University of Western Australia)

  • Thierry Volery

    (ZHAW School of Management and Law)

Abstract

Spouses are known to play a critical supportive role for the self-employed, yet very little evidence is available concerning how entrepreneurial pursuits affect the spouse. The present analysis offers a contribution by evaluating short-term psychological well-being dynamics among spouses of individuals entering self-employment, using panel survey data from Australia. We construct matched control samples based on a range of relevant characteristics to mitigate selection bias and find that spouses of self-employed individuals report substantially higher levels of well-being before entry into self-employment and experience a modest but statistically significant decrease in well-being following entry. This is consistent with the hypothesis that self-employment demands substantial psychological capital from spouses. These patterns hold for both genders, with only moderate gender differences identified. In contrast, spouses of those entering self-employment from unemployment report improvements in well-being.

Suggested Citation

  • Safiya Mukhtar Alshibani & Ingebjørg Kristoffersen & Thierry Volery, 2025. "Hidden costs of entering self-employment: the spouse’s psychological well-being," Small Business Economics, Springer, vol. 64(2), pages 307-332, February.
    • Handle: RePEc:kap:sbusec:v:64:y:2025:i:2:d:10.1007_s11187-024-00906-2
    DOI: 10.1007/s11187-024-00906-2
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    More about this item

    Keywords

    Self-employment; Entrepreneurship; Psychological well-being; Mental health; Spouses; Crossover theory; Difference-in-difference method;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • I10 - Health, Education, and Welfare - - Health - - - General

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