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"Status" concerns and self-employment transitions.

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Authors: Akay, Alpaslan1 (AUTHOR) alpaslan.akay@economics.gu.se, Yilmaz, Levent2 (AUTHOR) levent.yilmaz@plus.ac.at
Source: Small Business Economics. Dec2025, Vol. 65 Issue 4, p2113-2142. 30p.
Subject Terms: *Self-employment, *Occupational prestige, *Economic development, *Income inequality, *Entrepreneurship, Social comparison, Panel analysis, Respect
Geographic Terms: Germany
Abstract: This paper investigates whether individuals' relative (status or positional) concerns are associated with their transitions from paid employment or inactivity to self-employment. The conjecture is that stress and anxiety arising from socio-economic comparisons may be motivating factors for individuals to establish their own businesses. We examine this using the Socio-Economic Panel (SOEP) dataset, a long panel spanning three decades. Employing fixed-effects panel model specifications, we find that an increase in the income and job prestige of comparable others is associated with a higher probability of transitioning from paid employment or inactivity to self-employment. On average, a 10% rise in the income or job prestige of comparable others corresponds to a 7–10% higher likelihood of transitioning to self-employment. These findings are robust across various checks, including estimators, income definitions, and reference groups. The paper also explores catalysing factors such as risk-taking, skills, and autonomy, which moderate the relationship between relative concerns and the transition to self-employment. Plain English Summary: This study investigates whether concerns about socio-economic status influence people's transition from salaried employment to entrepreneurship. Using three decades of nationally representative panel data from Germany, the research finds robust evidence suggesting that socio-economic comparisons may drive individuals to start their own businesses in an effort to "keep up with the Joneses". This effect is large and might benefit the overall economy and society. On average, a 10% increase in the income or job prestige levels of comparable others leads to a 7–10% higher likelihood of transitioning from paid employment or inactivity to self-employment. Policymakers should reconsider the role of socio-economic comparisons when designing programmes to encourage entrepreneurship, as status concerns not only generate stress, anxiety, and unhappiness but also have the potential to stimulate self-employment and economic growth. [ABSTRACT FROM AUTHOR]
Database: Entrepreneurial Studies Source
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Header DbId: ent
DbLabel: Entrepreneurial Studies Source
An: 189797068
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PubType: Academic Journal
PubTypeId: academicJournal
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  Data: <searchLink fieldCode="AR" term="%22Akay%2C+Alpaslan%22">Akay, Alpaslan</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> alpaslan.akay@economics.gu.se</i><br /><searchLink fieldCode="AR" term="%22Yilmaz%2C+Levent%22">Yilmaz, Levent</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> levent.yilmaz@plus.ac.at</i>
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  Data: <searchLink fieldCode="JN" term="%22Small+Business+Economics%22">Small Business Economics</searchLink>. Dec2025, Vol. 65 Issue 4, p2113-2142. 30p.
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  Data: *<searchLink fieldCode="DE" term="%22Self-employment%22">Self-employment</searchLink><br />*<searchLink fieldCode="DE" term="%22Occupational+prestige%22">Occupational prestige</searchLink><br />*<searchLink fieldCode="DE" term="%22Economic+development%22">Economic development</searchLink><br />*<searchLink fieldCode="DE" term="%22Income+inequality%22">Income inequality</searchLink><br />*<searchLink fieldCode="DE" term="%22Entrepreneurship%22">Entrepreneurship</searchLink><br /><searchLink fieldCode="DE" term="%22Social+comparison%22">Social comparison</searchLink><br /><searchLink fieldCode="DE" term="%22Panel+analysis%22">Panel analysis</searchLink><br /><searchLink fieldCode="DE" term="%22Respect%22">Respect</searchLink>
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  Label: Geographic Terms
  Group: Su
  Data: <searchLink fieldCode="DE" term="%22Germany%22">Germany</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: This paper investigates whether individuals' relative (status or positional) concerns are associated with their transitions from paid employment or inactivity to self-employment. The conjecture is that stress and anxiety arising from socio-economic comparisons may be motivating factors for individuals to establish their own businesses. We examine this using the Socio-Economic Panel (SOEP) dataset, a long panel spanning three decades. Employing fixed-effects panel model specifications, we find that an increase in the income and job prestige of comparable others is associated with a higher probability of transitioning from paid employment or inactivity to self-employment. On average, a 10% rise in the income or job prestige of comparable others corresponds to a 7–10% higher likelihood of transitioning to self-employment. These findings are robust across various checks, including estimators, income definitions, and reference groups. The paper also explores catalysing factors such as risk-taking, skills, and autonomy, which moderate the relationship between relative concerns and the transition to self-employment. Plain English Summary: This study investigates whether concerns about socio-economic status influence people's transition from salaried employment to entrepreneurship. Using three decades of nationally representative panel data from Germany, the research finds robust evidence suggesting that socio-economic comparisons may drive individuals to start their own businesses in an effort to "keep up with the Joneses". This effect is large and might benefit the overall economy and society. On average, a 10% increase in the income or job prestige levels of comparable others leads to a 7–10% higher likelihood of transitioning from paid employment or inactivity to self-employment. Policymakers should reconsider the role of socio-economic comparisons when designing programmes to encourage entrepreneurship, as status concerns not only generate stress, anxiety, and unhappiness but also have the potential to stimulate self-employment and economic growth. [ABSTRACT FROM AUTHOR]
PLink https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=ent&AN=189797068
RecordInfo BibRecord:
  BibEntity:
    Identifiers:
      – Type: doi
        Value: 10.1007/s11187-025-01051-0
    Languages:
      – Code: eng
        Text: English
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        PageCount: 30
        StartPage: 2113
    Subjects:
      – SubjectFull: Self-employment
        Type: general
      – SubjectFull: Occupational prestige
        Type: general
      – SubjectFull: Economic development
        Type: general
      – SubjectFull: Income inequality
        Type: general
      – SubjectFull: Entrepreneurship
        Type: general
      – SubjectFull: Social comparison
        Type: general
      – SubjectFull: Panel analysis
        Type: general
      – SubjectFull: Respect
        Type: general
      – SubjectFull: Germany
        Type: general
    Titles:
      – TitleFull: "Status" concerns and self-employment transitions.
        Type: main
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          Name:
            NameFull: Akay, Alpaslan
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          Name:
            NameFull: Yilmaz, Levent
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          Dates:
            – D: 01
              M: 12
              Text: Dec2025
              Type: published
              Y: 2025
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              Value: 65
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              Value: 4
          Titles:
            – TitleFull: Small Business Economics
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