Self-exploitation or successful entrepreneurship? The effects of personal capital on variable outcomes from self-employment

Abstract

Purpose The purpose of this paper is to understand whether the personal capital of the entrepreneur positively or negatively affects outcomes from self-employment. Design/methodology/approach Data from the UK’s longitudinal household surveys (BHPS, UKLHS) between 1991 and 2014 were analysed. Relationships between age, education, health and family status, income earned and hours worked were tested. Findings Entrepreneurs with higher levels of personal capital enjoyed higher incomes. However, those with lower levels of personal capital were more likely to have negative returns from self-employment, and so experience it as “self-exploitation”. Research limitations/implications A basis for understanding different outcomes from self-employment was developed and tested. Practical implications Specific characteristics of continuing and new entrepreneurs were identified that are positively associated with beneficial outcomes from self-employment. Originality/value Positive and negative outcomes from self-employment are explained. The notion of personal capital is developed as an explanatory framework for variable outcomes from self-employment.