Abstract
This paper investigates the effect of risk aversion on an individual's probability of being self-employed by using psychometric data from a large, population-based cohort of Finns born in 1966. We found that our measure of risk aversion, a facet of a basic temperament dimension, harm avoidance, has a significant negative effect on self-employment status. Since this measure is directly derived from a highly valid biosocial theory of normal personality variation (Arch. Gen. Psychiatry 44 (1987) 573) whose scalable dimensions manifest well before adulthood and remain stabile over lifetime, we argue that risk aversion is a psychological factor causative of the choice to become self-employed.
| Original language | English |
|---|---|
| Peer-reviewed scientific journal | Labour economics |
| Volume | 12 |
| Issue number | 5 |
| Pages (from-to) | 649-659 |
| Number of pages | 11 |
| ISSN | 0927-5371 |
| DOIs | |
| Publication status | Published - 10.2005 |
| MoE publication type | A1 Journal article - refereed |
Keywords
- 511 Economics
- Self-employment
- Risk aversion
- Psychological test data
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Cite this
Ekelund, J., Johansson, E., Järvelin, M-R., & Lichtermann, D. (2005). Self-employment and risk aversion - Evidence from psychological test data. Labour economics, 12(5), 649-659. https://doi.org/10.1016/j.labeco.2004.02.009