The psychological strain of becoming self‑employed: a longitudinal investigation of honeymoon‑hangover effects

Publication type

Journal Article

Authors

Publication date

March 9, 2024

Summary:

Using British longitudinal data, we re-examine the honeymoon-hangover hypothesis (Boswell et al., 2005) for the psychological strain (measured by anxiety and depression) employees experience when they become self-employed. Most previous studies explore self-employment honeymoon-hangover effects mostly for job or life satisfaction. Employing the entropy balancing approach, we find that employees who make the transition to self-employment experience an immediate improvement in anxiety and depression, like that experienced by those who change employers. Our results hint at a slightly stronger initial improvement of psychological strain for those switching employers compared to those entering self-employment. However, within-individual variation analysis of psychological strain supports the honeymoon-hangover hypothesis in that any early anxiety and depression improvements taper off over time. Practical and theoretical implications are discussed.

Published in

Small Business Economics

DOI

https://doi.org/10.1007/s11187-024-00913-3

ISSN

15730913

Subjects

Notes

Open Access

This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

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