Health Consequences of Entrepreneurship in China: Evidence from Individual Fixed Effects Estimates

Abstract

A plethora of research has focused on the economic outcomes of Chinese entrepreneurs, but few have analyzed their life outcomes, especially health consequences. Our research aims to understand entrepreneurial health by exploring the causality between entrepreneurship and health outcomes in the Chinese context. We extracted five waves of data from a nationally representative dataset, that is, the China Family Panel Survey (2010, 2012, 2014, 2016, and 2018), to explore the causal relation. To solve the potential health selection in entrepreneurship, we applied a linear fixed-effects model to extract the causal relationship. In addition, with a nested design, we explored the mechanisms in the causal process. For self-rated health, self-employed people (β = .0696, p < .01) had significantly better self-rated health than employees. And employers (β = .113, p < .01) had even higher self-rated health. Job satisfaction and social status are effective mediators in this causal relation. For life satisfaction, employers (β = .191, p < .001) had a significantly higher life satisfaction than employees, while self-employed people have similar life satisfaction as employees. Job satisfaction and social status were effective mediators in this causal relationship. For mental health, while self-employed people were not significantly different from employees in terms of mental health, employers displayed a much lower mental wellbeing level than self-employed people or employees. Job satisfaction was an effective mediator in this causal relation, not social status. Our results showed that, similar to previous findings in Western countries, entrepreneurship would benefit one’s physical health and subjective wellbeing while worsening one’s mental health. Both job satisfaction and subjective social status were valid mechanisms in the process. Entrepreneurship exerts a significant influence on one’s health outcomes. The result implied that the government should implement supporting measures to alleviate entrepreneurial stress instead of only focusing on financial stress.