Are false own-account workers less job satisfied than true ones?

ABSTRACT

This article compares job satisfaction of true and false own-account workers. The latter group refers to own-account workers who are employed with the same tasks by the same employer for whom they previously worked as employees. To create a valid comparable group, the former workers are defined as paid employees who independently started a new business as own-account workers. Using data drawn from the European Community Household Panel for the EU-15 and controlling for possible self-selection issues, we observe that false own-account workers, compared with true ones, have less job satisfaction in terms of type of work, number of working hours, working times, and working conditions and environment. Our results are consistent with existing policies aimed to combat false self-employment developed by many OECD countries.

KEYWORDS:

• Own-account work
• job satisfaction
• dependency
• contracting out
• Europe

JEL CLASSIFICATION:

• J24
• J28
• K31
• L24
• O52

Acknowledgements

This work benefited from helpful comments and suggestions from an anonymous referee. An earlier version of this article was presented at the 2nd Global Workshop on Freelancing & Independent Professional Research (London, UK) in 2014.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ To the best of our knowledge, the only loosely related study is that of Millán and Millán (2017), who examine whether job control, job demands and job outcomes of dependent self-employed workers are more similar to those of the self-employed or paid employed.

² The ECHP data are used with the permission of Eurostat (contract ECHP/2006/09, held with the Universidad de Huelva).

³ Sweden was excluded from our analysis because this country presented missing values for several relevant variables.

⁴ For instance, to identify a transition from paid employment to FOA work, we need the following information from the individual: (i) declaring herself as a paid employee in the 1995 survey; (ii) declaring herself as self-employed in the 1996 survey; (iii) declaring herself that the number of regular paid employees in the local unit of their current job in the 1996 survey was 0; and (iv) declaring in both surveys, 1995 and 1996, that she started working for her current employer or at the same business in 1995 or before. A similar procedure is used in Román, Congregado, and Millán (2011).

⁵ The reliability of the job satisfaction index was good (with a Cronbach’s alpha of 0.78).

⁶ A precondition for running such a model is that significant between-group (in this case, countries) variance exists for the dependent variable (Hofmann 1997; Bliese 2000; Hofmann, Griffin, and Gavin 2000; Autio and Acs 2010). We therefore perform ANOVAs with each of our 8 job satisfaction measures as dependent variables and country group membership as the predictors. The intraclass correlation (ICC) coefficients indicate that the country-level variance is, for each factor, (i) nontrivial, (ii) highly significant, and (iii) within the normal range (5–20%) that can be expected of grouped data of this nature (Bliese 2000). Hence, using multilevel models is legitimate.

⁷ These results are not sensitive to the inclusion/exclusion of a control variable capturing job satisfaction the year before the transition. In addition, we reproduced Table 1 in order to compare job satisfaction of both groups the year before the transition and obtained no significant differences in terms of any of the 7 aspects of job satisfaction. Thus, we can rule out the option that our main results emerge as a result of happier workers self-selecting into true own-account work. Our results are also robust to the use of standard ordered logit models instead hierarchical ones. Finally, results in our model VIII are also robust to the use of both simple OLS and multilevel linear regressions. All results as regards these robustness checks are available upon request.

Additional information

Funding

The authors acknowledge funding from Junta de Andalucía through Research Group SEJ-487 (Spanish Entrepreneurship Research Group – SERG), from Strategy of Scientific Policy (Estrategia de Política Científica) 2016-2017 of the University of Huelva and from the Spanish Ministry of Economy and Competitiveness through projects ECO2013-48496-C4-4-R (Ana Millán) and ECO2013-43526-R (José María Millán and Concepción Román).