Self-employment and stress
Boyd and Gumpert (1983) demonstrated that the majority of the self-employed encounter physical
problems at least once a week (such as indigestion, insomnia, and headaches owing to stress), mainly
because they feel that being accountable for their business and their employees are burdensome. These
stress experiences are independent of whether the firm is performing well, suggesting that it is the overall
daily tasks and challenges that the self-employed must manage, and the accompanying workload in
particular, that increases the likelihood of experiencing stress (Boyd and Gumpert, 1983; Harris et al.,
1999). Nonetheless, Boyd and Gumpert (1983) have not compared work-related stress between the self-
employed and wage-paid workers. So far, empirical evidence comparing levels of stress between the self-
employed and wage-paid workers is increasing but lack a consistent result, and scholars have recently
called for further research into this topic (Shepherd and Patzelt, 2015; Baron et al., 2016). Table 1
summarises the prior studies that investigate differences in stress between the self-employed and wage-
paid workers. Some of these studies find that the self-employed experience higher levels of work-related
stress (Lewin-Epstein and Yuchtman-Yaar, 1991; Jamal, 1997;
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Blanchflower, 2004; Jamal, 2009) or life stress (Cardon and Patel, 2015) than wage-paid workers. Other
studies, however, do not find significant differences in perceived work-related stress (Andersson, 2008;
Parslow et al., 2004) or perceived life stress (Parasuraman and Simmers, 2001; Prottas and Thompson,
2006) between self-employed individuals and wage-paid workers. Some studies provide mixed results,
depending on the specific measurement used for stress (Buttner, 1992; Harris et al., 1999; Stephan and
Roesler, 2010). In addition, some studies suggest that work-related stress levels may be lower for the self-
employed than for wage-paid workers. Eden (1975), for example, finds that the self-employed experience
significantly less role strain in their work than wage-paid workers. A recent study using a sample of
business founders observes that perceived stress – although not specifically work-related – among
business founders is significantly lower than perceived stress reported in another study among wage-paid
workers (Baron et al., 2016). Moreover, Rahim (1996) finds that job stress is lower for the self-employed
than for managers. The overview in Table 1 indicates that empirical studies of the relationship between
self-employment and (work) stress provide contradictory findings. There are several reasons for this.
Firstly, many different stress measures have been used in these studies. Buttner (1992), for example,
measures stress according to health conditions that are thought to be related to stress (see also Stephan and
Roesler, 2010). Some studies focus on work characteristics that could lead to stress, such as role
ambiguity or role conflict (Eden, 1975; Rahim, 1996; Jamal, 1997; Harris et al., 1999), whereas others
capture more directly whether jobs are perceived as stressful (Lewin-Epstein and Yuchtman-Yaar, 1991;
Blanchflower, 2004; Andersson, 2008). Furthermore, some studies do not focus explicitly on work-related
stress, but rather assess life stress (Parasuraman and Simmers, 2001; Prottas and Thompson, 2006; Baron
et al., 2016). Secondly, some studies use measures other than self-employment to define occupational
statuses, such as being a
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business founder (Rahim, 1996; Baron et al., 2016), business-owner (Parasuraman and Simmers,
2001) or owner-manager (Buttner, 1992), and generally no distinction is made between different types
of self-employment. Thirdly, Table 1 reveals that several studies employed very small samples and
that several of the samples were collected from specific environments and time periods, which could
also be a factor contributing to the mixed results. Finally, the studies are all cross-sectional, except
one that uses data from two different years (Andersson, 2008). Moreover, it is noted that the methods
used are relatively simple and at descriptive-level, with only a few studies employing multivariate
regression analysis (Lewin-Epstein and Yuchtman-Yaar, 1991; Blanchflower, 2004; Parslow et al.,
2004; Andersson, 2008). The use of descriptive methods could also explain the divergent outcomes of
the studies, which do not control for any additional factors (other than employment status) that
contribute to stress.
These mixed findings in the existing literature render it difficult to draw general conclusions about
the relationship between self-employment and work-related stress. The literature on this topic is
growing but remains limited, and theory does not drive the empirical analyses (of cross-sectional
samples of relatively small size). In fact, none of the studies included in Table 1 attempt to theorise
and empirically analyse the causes of potential stress differences between the self-employed and
wage-paid workers, or between different groups within self-employment. Consequently, in
consideration of no consistent result from prior studies on the difference between the self-employed
and employees, Thus, it is assumed:
Hypothesis 1a: Self-employed (solo self-employed and self-employed with hiring employees)
experience less work-related stress than individuals in wage work.
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Hypothesis 1b: Self-employed (solo self-employed and self-employed with hiring employees)
experience higher work-related stress than individuals in wage work.
As noted above, this study distinguishes self-employment into self-employed individuals with
and without employees. The distinction between self-employed people running businesses
that employ others (self-employed with employees) and those who work on their own (self-
employed without employees) is often made in entrepreneurship research (e.g., Earle and
Sakova, 2000; Blanchflower, 2004; Prottas and Thompson, 2006; Sorgner et al., 2014;
Tamvada, 2010). Both subgroups have created jobs for themselves, but the self-employed
with employees also provide jobs for others and are therefore of particular interest for the
economists (Blanchflower, 2004). These different types of self-employed individuals may
also experience dissimilar levels of work-related stress. The general absence of this
distinction in earlier studies of stress and self-employment may explain the mixed findings in
this stream of research (Shepherd and Patzelt, 2015). Hessels and his colleagues (2016)
conducted research to find the differences of work-related stress between self-employed and
employees, with the findings indicating that the self-employed with hiring employees
experience higher stress than the solo self-employed, due to high job demands by using mean
difference. Thus, this study aims to provide more empirical evidence to verify this result.
Hypothesis 2: self-employed with hiring employees experience higher stress than solo self-
employed.
In the next paragraph, this study uses the JDCS model to understand the relationship between
self-employment and work-related stress and to make predictions about relationships based
on the JDCS model suggested.
Introduction
According to the World Health Organisation, impaired psychological wellbeing is one of the most
prominent causes of reduced job involvement and absenteeism from the workplace (Harnois and
Gabriel, 2000). The most common reason for this impaired psychological wellbeing is work stress,
which occurs when job requirements exceed employee mental and physical resources such that they
are perceived as threatening or even harmful (Lazarus and Folkman, 1984; World Health
Organization, 2014). A high level of work-related stress can produce negative impacts at individual,
organisational and even societal level. At the individual level, high stress from work can threaten
one’s mental and physical health, overall wellbeing and even is associated with disease incidence and
reduced life expectancy (Gardner and Oswald, 2004). At the organisational level, work stress
adversely affects efficiency, productivity and work-team performance. At the social level, stress
consumes significant social resources and increases financial costs. It is estimated that €617 billion is
spent annually for dealing with job depression (including stress) in Europe (EASHW, 2014). This
figure comprises costs to employers, loss of productivity, health-care costs, and social welfare costs
in the form of disability benefit payments. Therefore, understanding the production mechanisms, and
coping strategies of work-related stress is crucial to individuals, organisations and policymakers.
The self-employed, as a particular occupation group, has always been associated with positive words
such as economic growth, potential job creation and employment (Koellinger and Thurik, 2012；De
Wit and De Kok, 2014), and has therefore attracted the attention of governments and academia.
However, the start-up of a new venture is precarious: most entrepreneurial activities end in ‘near-
misses’’ (Renko, 2013). In other words, the majority of entrepreneurial activities die while
emerging. Reynolds (2007) found that during six years from entering the entrepreneurial process,
about one-third left their self-employment activity. Workplace wellbeing is a prominent motivator
for self-employment, thus understanding the causes and coping mechanisms of self-employed work-
related stress will allow researchers and policymakers to develop suitable approaches to reducing the
rate of self-employment exit, and enhancing their entrepreneurial development.
In the past, many studies have linked self-employment with positive emotional outcomes such as
passion, excitement, happiness, flow, and satisfaction (Patzelt and Shepherd, 2011). With policy
focus moving to work-related stress, the association between self-employment and work stress has
been continually emphasised by academia (Shepherd and Patzelt, 2015; Baron et al., 2016).
However, there are a limited number of studies in this area, and the question remains as to whether
the self-employed experience higher or lower work-related stress. Initial studies found self-
employment to be positively associated with work-related stress (Andersson, 2008; Blanchflower,
2004; Harris et al., 1999; Jamal, 2009). More recently, the opposite effect has been observed (Patzelt
and Shepherd, 2011; Baron, Franklin and Hmieleski, 2016; Hessels, Rietveld and Zwan, 2017).
However, studies on explore the factors contribute to the work-related stress are rare and call for the
further research urgently (Hessels, Rietveld and Zwan, 2017).
To better understand the factors contribute to the work-related stress, this paper will use the Job-
Demand-Control-Support model (JDCS) as the conceptual model. This is a popular model developed
by Karasek (1989) and outlines the impact of specific job characteristics (job demand, job control,
and social support) on work-related stress. JDCS is an extension of the Job-Demand-Control model
(JDC), integrating social support into the model as a further fundamental characteristic
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associated with work stress. JDC has been applied in Hessels, Rietveld and Zwan’s (2017) paper to
study self-employed work-related stress and considered the role of job demands and job control on
work-related stress but excludes the social support. With the aim of expanding Hessels, Rietveld and
Zwan’s (2017)’s research, this study will take social support into account and test the JDCS model.
The JDCS model contains two kinds of relationship between JDCS dimensions and work-related stress:
1) the additive effects of demands, control, and social support on reducing stress, and 2) interactive
effects predicted by the buffer hypotheses of the JDCS model: which involves interaction among
characteristics on stress. In previous literature applying the JDC/JDCS models, the additive effects
are consistently found when sufficiently large samples are employed (Niedhammer, Chastang and
David, 2008; Edimansyah et al., 2008; Ibrahim, and Ohtsuka, 2014). Concerning interactive effects,
the empirical status of the interactive hypotheses is less conclusive: only weak empirical support for
multiplicative effects has been obtained to date. For example, Van der Doef and Maes (1999)
reported that out of 31 studies that examined the moderating effect of work characteristics on work-
related wellbeing, only 5 partially supported the buffering hypothesis of the JDCS model. This issue
was addressed in a critical theoretical article by Taris (2006). By interpreting the body of evidence
presented by van der Doef and Maes (1999), Taris raised the question of whether the interactive
hypothesis is a ‘‘zombie theory’’, as it should die due to lack of empirical evidence, but persists in
theoretical debate and empirical research. In particular, there has been limited empirical studies
examining the effects of social support (Riolli and Savicki, 2003; Thong and Yap, 2000) Therefore,
this study aims to provide more empirical evidence to answer Taris’ question, and test the
moderating effects of social support on work-related stress.
In addition, this study predicts differences in work-related stress between two types of self-
employment: solo self-employment and self-employment with hiring employees, as they may
experience different levels of work-related stress. For example, the sets of tasks of the self-
employed with hiring employees have to require a variety of skills and experiences (Lazear,
2005). Self-employed individuals with employees need to make supervisory decisions regarding
how their employees should allocate their time and effort (Hébert and Link, 2009). Prior studies
among wage-paid workers indicate that supervisors report more stress than those without a
supervisory role (Groot and van den Brink, 1999). Hessels, Rietveld and Zwan (2017) based on
the JDC model, found work-related stress to be higher for the self-employed with (rather than
without) employees, due to their higher job demand.
Regarding research gaps discussed above, this study proposes to answer the following questions:
1) How does work-related stress differ among employees, the solo self-employed and the self-
employed with hiring employees? 2) How do job demand, job control, and social support affect
work-related stress among the three occupation groups? 3) What are the moderating effects of
social support on the relationship between other factors and work-related stress? The dataset is
sourced from Understanding Society, the largest UK household dataset, consisting of 13,917
observations (Employees: n=12,348; Solo self-employed: n=1,282; self-employed hiring
employees: n=287). This study merges Waves 5 and 6 datasets to capture all required variables
(University of Essex, 2016).
This study aims to contribute to the literature in three ways: 1) by comparing work-related stress
between employees, solo self-employed and self-employed with hiring employees, this study strive
to provide further empirical evidence to answer the question: Do the self-employed experience higher
or
lower work-related stress? 2) This study will provide new empirical evidence to test the JDCS
model, particularly in terms of the interaction effects of social support, which largely lacks
empirical evidence, especially concerning the self-employed group. 3) This study will use a
matching approach to update the dataset. By applying this method and controlling for the
demographic differences among groups, this study can present a more accurate picture of group
differences and can shed some light on the research approach for further comparative studies.
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