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The aim of this study is to provide an explanation for the finding in earlier studies that the self-employed are, on average, more satisfied with their work than the paid employed are, although they are not more satisfied with their life in general. Fixed-effects regressions are performed with German Socio-Economic Panel data (1984–2012) to investigate how a labor market switch from paid employment to self-employment influences life, work, and leisure satisfaction. The results indicate that switching to self-employment benefits work satisfaction but not life satisfaction. The benefits for work satisfaction are pro- nounced and relatively persistent but accompany large and persistent decreases in leisure satisfaction. Life satisfaction for the switchers to self-employment is consequently on par with the life satisfaction of the non-switchers. Contrasting the switch to self- employment (out of paid employment) with the switch to paid employment (out of self- employment) shows that the detrimental effect on leisure satisfaction distinguishes a switch to self-employment from a switch to paid employment. In conclusion, the results explain why increases in life satisfaction are generally absent for individuals switching to self-employment and why undetermined evidence has been found in previous studies in terms of gains in life satisfaction.

The birth order literature emphasizes the role of parental investments in explaining why firstborns have higher human capital outcomes than their laterborn siblings. We use birth order as a proxy for investments and interact it with genetic endowments. Exploiting only within-family variation in both ensures they are exogenous as well as orthogonal to each other. As such, our setting is informative about the existence of dynamic complementarity in skill production. Our empirical analysis exploits data from 15,019 full siblings in the UK Biobank. We adopt a family-fixed effects strategy combined with instrumental variables to deal with endogeneity issues arising from omitted variables and measurement error. We find that birth order and genetic endowments interact: those with above-average genetic endowments benefit disproportionally more from being firstborn compared to those with below-average genetic endowments. This finding is a clean example of how genetic endowments ('nature’) and the environment ('nurture’) interact in producing educational attainment. Moreover, our results are consistent with the existence of dynamic complementarity in skill formation: additional parental investments associated with being firstborn are more ‘effective’ for those siblings who randomly inherited higher genetic endowments for educational attainment.

Van Praag et al. (2013) analyze whether the returns to formal education in terms of income differ between entrepreneurs and employees. Using US data (1979–2000), they find that entrepreneurs have higher returns to formal education than employees. They also find evidence that the level of personal control in one’s occupation explains these higher returns. In the present study, we aim to replicate these findings using a dataset from a different country (Australia) and time period (2005–2017). Moreover, we extend the study by Van Praag et al. (2013) by distinguishing between entrepreneurs with and without employees. In accordance with Van Praag et al. (2013), we also find higher returns to education for entrepreneurs compared to employees. However, this finding mainly applies to the entrepreneurs without employees. Moreover, we do not find evidence for a mediating role of personal control in this relationship.

Taller individuals have on average a higher socio-economic status than shorter individuals. In countries where entrepreneurs have high social status, we may therefore expect that entrepreneurs are taller than wage workers. Using data from the German Socio-Economic Panel (2002–2012), we find that a 1 cm increase in an individual's height raises the probability of being self-employed (the most common proxy for entrepreneurship) versus paid employed by 0.15 percentage points. Within the self-employed, the probability of being an employer is increased by 0.10 percentage points as a result of a 1 cm increase in height, whereas this increase is 0.05 percentage points for an own-account worker. This result corroborates the higher social status of employers compared to own-account workers. We find a height premium in earnings for self-employed and paid-employed individuals: an additional 1 cm in height is associated with a 0.39% increase in hourly earnings for paid employees and a 0.52% increase for self-employed individuals. Our analysis reveals that approximately one third of the height premium in earnings is explained by differences in educational attainment. We also establish the existence of a height premium in terms of work and life satisfaction, which is more pronounced for paid employees than for self-employed individuals.

The supposed creativity of left-handed and dyslexic individuals may fit well with an entrepreneurial occupation. Empirical evidence from two representative Dutch samples, however, shows that left-handed and dyslexic individuals are not more likely to be(come) entrepreneurs than right-handed and non-dyslexic individuals.