Instant gratification: temporal discounting and self-employment

Instant gratification: temporal discounting and self-employment Differences in temporal discounting could separate self-employed individuals from employees working for wages. Drawing on a sample of 13,198 individuals, from the 2012–2013 cross-sectional STEP Skills Measurement Survey, we find that higher temporal discounting is more positively associated with the likelihood of self-employment. We further find that younger individuals with higher temporal discounting are more likely to engage in self-employment. The association of lower socioeconomic status at a young age or those who experienced economic shocks at a young age with the likelihood of self-employment is only significant when interaction effects of temporal discounting and age are present in the model. Risk seeking is not associated with the likelihood of engagement in self-employment under higher discounting. These findings have implications for the self-employment literature as well as the literature on behavioral decision making. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Instant gratification: temporal discounting and self-employment

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Publisher
Springer Journals
Copyright
Copyright © 2016 by Springer Science+Business Media New York
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-016-9823-9
Publisher site
See Article on Publisher Site

Abstract

Differences in temporal discounting could separate self-employed individuals from employees working for wages. Drawing on a sample of 13,198 individuals, from the 2012–2013 cross-sectional STEP Skills Measurement Survey, we find that higher temporal discounting is more positively associated with the likelihood of self-employment. We further find that younger individuals with higher temporal discounting are more likely to engage in self-employment. The association of lower socioeconomic status at a young age or those who experienced economic shocks at a young age with the likelihood of self-employment is only significant when interaction effects of temporal discounting and age are present in the model. Risk seeking is not associated with the likelihood of engagement in self-employment under higher discounting. These findings have implications for the self-employment literature as well as the literature on behavioral decision making.

Journal

Small Business EconomicsSpringer Journals

Published: Dec 24, 2016

References

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