Financial problems and perceived well-being among the European self-employed, the role of social

trust and collectivism

Authors: Marjan Gorgievski, Psychology

Anne Annink, Public AdministrationFabian Dekker, Sociology

Erasmus University Rotterdam, Rotterdam, The NetherlandsICAP, July 9 – 13, 2014, Paris

Background

Economic crisis in Europe, 23% of Europeans report they are living comfortably and 45% say they are getting by (Gallup, 2014).

The self-employed are important for society

What are the effects of financial hardship on the well-being of self-employed people?

Theoretical background is Conservation of Resources Theory (Hobfoll, 2002). Basic premises:

People strive to protect and increase their resources

(Potential) loss of resources is stressful, leading to impaired well-being

People need to invest resources to gain resources and prevent (further) resource loss, which may lead to resource loss spirals

Resource caravans: More resourceful people, people from more resourceful environments are better able to prevent and stop loss cycles.

Ecological Stress Theory

Research model

Financial hardship Well-being

Country level

Individual level Social trust

Collectivism

-

-

-+

H1. Financial problems relate to financial hardshipH1a. Differences in level of financial hardship between

countries explain country differences in level of wellbeing

H2a. Social resources on individual level (social trust) buffer the negative hardship – well-being relationship

H2b. Social resources (collectivism) on societal level buffer the negative hardship– well-being relationship

H2c. There is a three way interaction of individual and societal social resources -> stronger buffer.

Hypotheses

Sample: European Social Survey rounds 2004 and 2010 N = 9755 participants, 64% male, age on average 52.05, sd 15.97. From 31 European countries, 18 countries participated twice

2x: Belgium (N=347), Switzerland (N=431), Czech Republic (N=430), Germany (N=503), Denmark (N=286), Estonia (N=211), Spain (N=487), Finland (N=461), United Kingdom (N=447), Greece (N=1248), Ireland (N=550), The Netherlands (N=381), Norway (N=303), Poland (N=480), Portugal (595), Sweden (N=364), Slovakia (N=262) and Ukraine (N=137).

1x: Austria (208), Bulgaria (119), Cyprus (179), France (161), Croatia (87), Hungary (105), Israel (232), Iceland (74), Lietuva (16), Luxembourg (156), Romania (117), Turkey (216)

Sample descriptives

Social trust, 3 items, e.g. Most people can be trusted; answers 1 (poor) – 10 (good), Alpha reliability 0.78

Collectivism, 11 items Schwartz’ PVQ ; Alpha reliability = .77. Scales corrected according to Schwartz’ recommendations.

Financial hardship, 2 items (household income and borrowing money), 1 (good) -5 (poor), Alpha reliability =0.92

Perceived subjective well-being ,3 items, satisfaction, happiness, general health; answers range 1 (poor) – 5 (good); Alpha reliability = .07)

More information: http://www.europeansocialsurvey.org/

Measures

Descriptivesupper individual level (n = 9755), lower diagonal country * year level (

age gender edusup trust col

Col_mfin

wel

Age - .002 -.12** .01 .03* -.37** -.09** .08** -.15**

Gender (1 = male) .04 - -.03* -.15** -.01 .14** .02 -.09** .04*

Higher education (edu) -.14 -.01 - -.08** .12** .17** .11** -.16** .13**

Supervising 3) (1 = yes) .04 -.18 -.39** - -.06** -.11** -.10** .19** -.10**

Social trust .42** .28 .20 -.31 - .04** .16** -.30** .34**

Collectivism -.05 -.01 .11 -.29 .50** - .28** -.17** .14**

Collectivism_m -.36* -.05 .28 -.36 .15 .58** - -.16** .08**

Financial hardship -.36* -.41* -.17 .38 -.83** -.41** -.08 - -.44**

Well-being .46** .42* .17 -.35 .79** .11 -.04 -.86 -

M 52.05 .64 .17 .61 4.96 -.27 -.27 2.17 3.81

SD 15.97 .48 .38 .49 2.07 .44 .12 .86 .76

Results Regression analyses

Model 0

controls

Model 1

Controls + hardship

Model 2

trust * hardship

Model 3

(random slope)

Model 4

Collectivism *

hardship

Age -.01 *** (.000) -.01 *** (.000) -.01 *** (.000) -.01 *** (.000) -.01 (.000)

Gender -.03 (.02) -.01 (.02) -.01 (.02) -.01 (.02) .01(.01)

Edu .14 *** (.02) .07*** (.02) .07*** (.02) .07*** (.02) .07(0.2)

Supervising -.08 *** (.01) -.02 (.01) -.02 (.02) -.02 (.02) -.02(.01)

Trust .09 *** (.003) .07 *** (.003) .04 *** (.01) .04 *** (.01) .07(.01)

Collectivism (culture) -.35 (.33) -.35 (.33) -.36 (.25) -.36 (.25) .18(.23)

Financial hardship -.29***(.01) -.37***(.02) -.37***(.02) -.36(.03)

interaction .01** (.004) -.24(.12)

2 x log 18295.56 16663.27 16656.48 16607.85 16606.59

Δ 2 x log 102.31 1632.29 6,79 48.63 0.99

df 9 10 11 12 12

UV Individual .44 (.01) .40 (.01) .40 (.01) .40 (.01) .40 (.01)

UV country * ess round .08 (.01) .04 (.01) .04 (.01) .02 (.01) .02 (.01)

UV slope hardship .01 (.002) .01 (.002)

H1 supported

H1b supported. (additional analyses show no “round” variance was explained)

H2a supported H2 b (and c) were not supported

Slope variance, financial hardship / well-beingrelationship significantly different across countries

Interaction plot social trust * financial hardship

Strengths and weaknesses

Strength of the study:

large sample size

many European countries are represented

two data points (before and after the crisis)

Weaknesses:

Short and diverse nature of the measures,

panel data, but not longitudinal (within person)

Financial hardship relates negatively to well-being, and differences in levels of financial hardship explain differences in well-being acrosscountries

ESS data show support for a buffer effect of social trust. The averagelevel is very low, so may be worth while investing in trying to increasethis social buffer.

Current analyses show the strength of the hardhip-wellbeingrelationship differs across countries.

We have not been able to find an explanatory mechanism for these differences, yet.

To conclude

Future studies: Investigate the effect of other possible cross-country

buffers of the hardship – well-being relation (e.g., unemployment benefit), which would aid European policy making.

Not just include culture at the country level, but alsolook at personal values differences within countries(would actually be possible with ESS data).

More generally, look at person-environment interactionsto develop more tailor made solutions.

Future studies: