Health

Entrepreneurs Healthier Than Workers, Study Says

The dream of owning your business and having to answer to no one but yourself appears to be a healthier way of life than being an employee, according to an article published by a scholar affiliated with a prestigious D.C. think tank.

Dr. Milena Nikolova, who serves on the faculty of economics and business for the University of Groningen in The Netherlands, authored a groundbreaking piece, “Self-Employment May be Good for Your Health,” posted May 29 on the Brookings Institution’s website.

“There is a very large literature from around the world that generally shows that the self-employed are more satisfied with their jobs compared to similar regular workers,” said Nikolova, who works with Brookings as a nonresident fellow in global economy and development.

Nikolova measured workers of the same age, gender, working in the same industry and earning the same salary. The basis of her data comes from Germans, tracking individuals and their careers over time. She said becoming one’s own boss “improves the mental health of those who were initially unemployed and of individuals who were formerly full-time employees.”

“In Germany, self-employment is about 10 percent of total employment and about five percent of the population is the owner/manager of a new business or in the process of starting one,” Nikolova said, noting her findings were first published in a recent edition of The Journal of Business Venturing.

In the U.S., there are 28 million small businesses and 22 million of those have one employee — the owner — according to statistics from the U.S. Small Business Administration.

Nikolova created two classes of entrepreneurs in her study. Those who are “opportunity entrepreneurs” left their 9-to-5 jobs for self-employment showed improved physical health, she said.

However, “necessity entrepreneurs,” people who went from unemployed to owning their businesses, did not see a change in physical health. She noted that mental health gains were greater for those escaping unemployment than for those switching from regular jobs.

“This is not just because they avoid the stigma of being unemployed, but also likely because they get an identity boost from being self-employed,” she said.

Nikolova said given the large psychological costs of unemployment, self-employment provides a livelihood and a mental health gain to those who “escape the misery of joblessness.”

Nikolova said her research reveals that entrepreneurs are very busy and work long but are “better able than regular workers to shift around their appointments and go to the gym which helps them stay healthy.”

“Therefore it could be that the self-employed indeed make it a point to stay healthy because they have to rely on themselves more than regular employees and they can earn an income only when they are healthy and working,” she said.

Babatunde Oloyede, president and CEO of the Marshall Heights Community Development Organization in Ward 7, an employee of Accenture, a global management consulting firm, and owner of a clothing business in the District, said Nikolova’s study makes sense.

“What she is saying is accurate,” Oloyede said. “As a business owner, you are doing everything and things fall on your hands. It is critical that business owners stay as healthy as they can because it can be stressful when things fall behind. As an employee, you are working for someone else and have to abide by their rules.”

Oloyede said being able to go to the gym at the time of the entrepreneur’s choosing and eating healthy are components of balance in a business owner’s life.

“The business owner has to have the mindset that staying healthy is a priority and they should work hard to keep their lives healthy and balanced between work and leisure,” he said.

Many employers have programs to help employees stay healthy and Nikolova said government should experiment with incentives for entrepreneurs to be fit.

“My study implies that any programs that promote entrepreneurship may have health benefits, at least in the short run,” she said. “Therefore, policies such as startup subsidies may not just help the self-employed with setting up their businesses but may also improve entrepreneurs’ health. However, policy programs targeting the health of business owners may prove to be beneficial but to know that for sure, the effectiveness of such programs must be thoroughly evaluated.”

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