Small Business Economics

, Volume 49, Issue 1, pp 233–249 | Cite as

Job dissatisfaction of the self-employed in Indonesia

  • Illoong Kwon
  • Kitae Sohn


In developed countries, the self-employed have been found to be more satisfied with their jobs than paid employees. We found the exact opposite for a developing country after analyzing 8732 respondents in the Indonesian Family Life Survey. The job dissatisfaction of the self-employed was not fully explained by earnings, personal traits, job characteristics, anticipation, or adaptation, but mostly by segregation into a small number of industries with few job benefits. This finding is consistent with the dual labor market theory. We also found that among the self-employed, those with the highest probability of being paid employees were the least satisfied. Paid employment was highly sought after in developing countries, and these were presumably self-employed workers with high abilities. This finding cannot be explained by the dual labor market theory alone. To explain this inconsistency, we enriched this theory with relative deprivation. Our results suggest that the existence of the dual labor market and relative deprivation are important determinants of the job satisfaction of the self-employed in developing countries.


Self-employment Job satisfaction Social comparison Developing country Indonesia 

JEL classifications

I31 J28 L26 O53 



We are grateful to the two anonymous reviewers for their helpful comments and suggestions.


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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Graduate School of Public AdministrationSeoul National UniversitySeoulSouth Korea
  2. 2.School of Economics and FinanceCurtin UniversityPerthAustralia
  3. 3.Department of EconomicsKonkuk UniversitySeoulSouth Korea

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