Financial hardship and well-being: a cross-national comparison among the European self-employed

Based on data from the 2004 and 2010 European Social Survey, this multidisciplinary and cross-national comparative study investigates the relationship between financial hardship and subjective well-being among 9,755 self-employed individuals from 31 European countries. It also aims to identify potential mitigating factors in this relationship on both the individual and the country level. Multilevel regression analyses reveal a strong relationship between financial hardship and impaired well-being, explaining about 36% of variance in well-being between conditions (countries and time periods) and 8% of variance between individuals. In other words, economic conditions matter significantly. Additionally, education and social trust act as important buffering factors for individuals, and the relationship between financial hardship and impaired well-being is somewhat weaker for self-employed persons living in countries with a more supportive social policy in the form of unemployment allowance. Entrepreneurs can hence mitigate the consequences of financial hardship by protecting social resources, and policymakers can be advised to invest in education and social security.