Factors Affecting Subjective Well-Being in Workers at Small-Sized Enterprises: A Cross-Sectional Study from the 6th Korean Working Conditions Survey

Abstract

Purpose

In 2021, 23.9% of Korean workers were self-employed, with the majority working in small enterprises. As the unemployment rate increased after the COVID-19 outbreak, the number of small enterprises increased annually. Although interest in the health of small enterprises is increasing, insufficient research has been conducted. This study compared the well-being levels of self-employed and salaried workers in small enterprises and identified the factors affecting them.

Materials and Methods

Data were obtained from the 6th Korean Working Conditions Survey (KWCS). Adults aged ≥40 years with Korean nationality working in small enterprises (less than 50 employees) in the service/sales private sector were included. Of the 50538 respondents, 2511 (942 male, 1569 female) were included. The general characteristics of the participants were identified. The well-being levels were analyzed using subjective health items and the WHO-5 well-being index, included in the 6th KWCS. Statistical analysis was performed using logistic regression analysis.

Results

People without chronic illnesses and salaried workers reported higher levels of well-being. Additionally, people who were younger, more educated, and had higher monthly incomes reported higher levels of well-being. Salaried workers showed higher levels of well-being compared to self-employed workers when stratified by the number of employees, working hours per week, and chronic illness.

Conclusion

Self-employed workers had significantly lower levels of well-being compared to salaried workers in small enterprises. Therefore, future health policies should include measures to improve the well-being or mental health of self-employed workers. Given past trends, involuntary self-employment tends to rise during recessions, making policy interventions crucial during such periods.

Graphical Abstract

INTRODUCTION

In 2021, self-employed workers accounted for 23.9% of all workers in South Korea, ranking 6th among the 38 member countries of the Organization for Economic Co-operation and Development (OECD).¹ This was five times higher than Norway’s 4.7%, the lowest rate among OECD countries, 3.5 times higher than the United States’ 6.6%, the second lowest rate, and 1.5 times higher than the 14.5% average of 27 European Union countries. Of all self-employed workers, 99.7% operated small businesses with less than 50 employees.² Additionally, in 2019, before the World Health Organization (WHO) declared the COVID-19 pandemic, the rate of self-employed people in Korea had increased by 6.3% from the previous year. Enterprises with 1 to 4 and 5 to 9 employees increased by 7.1%, and 6.3%, but those with 10 to 29 and 30 to 49 employees decreased by 3.6%, and 1.5%, respectively.² Most self-employed enterprises in Korea are small-scale, and their percentage has increased significantly since the COVID-19 outbreak.

There have been significant changes in the Korean labor market since the COVID-19 outbreak. The unemployment rate increased in the first quarter of 2020 and exceeded 5% in the first quarter of 2021.³ Presumably, these changes include an increase in both voluntary and involuntary retirement, such as layoffs of temporary and daily workers, as well as honorary retirement. According to data from the Ministry of SMEs (Small and Medium Enterprises) and Startups in Korea in 2023, Korea had 4143034 and 18492614 employees working in 9369 large companies and 7713895 SMEs, respectively, in 2021. Among these, the number of SMEs increased by 5.9% year on year, accounting for 95.0% of all enterprises.⁴

Most Korean enterprises have set their retirement age at 60–65 years. In May 2018, before the COVID-19 outbreak, the age at which people resigned their longest-serving job was 51.4 years and 47.1 years for male and female, respectively. In May 2020, after the COVID-19 outbreak, it was 51.2 years and 47.9 years for male and female, respectively.⁵ Notably, the number of male and female retiring earlier and later is increasing, respectively. It is assumed that male retire early due to the relatively high cost of high-intensity labor in the industrial recession, while female’s participation in lower-cost economic activities rises.

Most retirees in these age groups are at risk of poverty since they cannot receive a pension (for example, in the case of the National Pension in Korea, individuals born after 1969 can receive their pension at the age of 65 years).⁶,⁷,⁸ Therefore, it is possible for more people to launch their own businesses to escape this crisis. In reality, one-person businesses, such as real estate and transportation, can be operated by an individual and account for more than 90% of self-employed enterprises.⁴ However, insufficient research has been conducted on factors affecting the health and well-being of workers engaged in self-employment in this age group.

Therefore, this study examined the well-being levels of self-employed and salaried workers based on the 6th Korean Working Conditions Survey (KWCS) and the WHO-5 well-being index, targeting service/sales workers, who account for the majority of the self-employed workers, and identify the factors affecting them.

MATERIALS AND METHODS

Study population

This study used the 6th KWCS, which was conducted from October 5, 2020 to April 11, 2021 by the Korea Occupational Safety and Health Research Institute (OSHRI). The KWCS was developed by the OSHRI, based on the European Working Conditions Survey and the UK Labour Force Survey.⁹,¹⁰ This study was conducted six times from 2006 to 2020. The reliability and validity of the KWCS have been confirmed in previous studies.¹¹ The survey was conducted by experienced researchers who had completed the prior interview training. They visited the selected households and conducted one-on-one interviews with each household member using an electronic questionnaire in-stalled on a tablet PC (computer-assisted personal interview, CAPI). Data were collected using the paper and pen interview method only when the survey could not be conducted by CAPI due to circumstances such as tablet PC breakdown.⁹

First, among the 50538 respondents who participated in the 6th KWCS, 14232 Korean adults aged ≥40 years and working in the service/sales private sector were selected. Service workers included caregivers, hairdressers, wedding ceremony workers, fortune tellers, chefs, and cooks. Sales workers included automobile sales representatives, insurance salespersons, cashiers, door-to-door salespersons, street stall salespersons, food and beverage salespersons, online salespersons, and telemarketers, etc. Next, 11006 self-employed and regular workers who had one job and worked at one site were selected. Among them, 9528 workers who had worked for more than 1 year in small enterprises with less than 50 employees were selected. Of these, those with a monthly income of more than 8000 thousand KRW (Korea Won), those with missing items in the questionnaire (education level, working hours per week, chronic illness, subjective health status, and WHO-5 well-being index-related items), and shift workers were excluded. Finally, a total of 2511 participants (942 male and 1569 female) were included. This study was approved by the Institutional Review Board (IRB) of Gyeongsang National University Changwon Hospital (IRB Number: GNUCH 2023-10-019).

Survey

We used data from the 6th KWCS to identify the general characteristics of the participants, such as sex, age, education level, occupation, monthly income, number of employees, working hours per week, presence of chronic illnesses (lasting or expected to last for more than 6 months), and employment type [self-employed or salaried (regular worker)]. Additionally, participants’ well-being levels were analyzed using subjective health items and the WHO-5 well-being index included in the KWCS.

Age was categorized into 40–49.9 years, 50–59.9 years, and ≥60 years. Education level was categorized into high school graduate or below and college or above. Monthly income was stratified into under 2000, 2000–2990, 3000–3990, and 4000–7990 thousand KRW (1000 thousand KRW≒887 USD≒809 EUR, average during the survey period). Occupation was limited to service/sales jobs, and regular workers were selected among all self-employed and salaried workers. The number of employees was stratified into 1 to 4, and 5 to 49. Working hours per week were divided into ≤40 hours and >40 hours, based on the statutory working hours per week under the Korean Labor Standards Act.¹²

Subjective health conditions

The 6th KWCS questionnaire evaluated subjective health conditions as follows: “Generally, how is your health?” with options ranging from 1) very good, 2) good, 3) average, 4) bad, to 5) very bad. In this study, the items were evaluated in reverse order, with “very bad” assigned 1 point and “very good” 5 points. Additionally, we categorized the responses into “healthy status” (1) very good, 2) good) and “unhealthy status” (3) average to 5) very bad), and analyzed the health status.

WHO-5 well-being index

The 6th KWCS questionnaire contained five questions on the WHO-5 well-being index: “Over the last 2 weeks, 1) I have felt cheerful and in good spirits, 2) I have felt calm and relaxed, 3) I have felt active and vigorous, 4) I woke up feeling fresh and rested, and 5) My daily life has been filled with things that interest me.” The first score was calculated as the sum of the following responses: 1) all the time, 2) most of the time, 3) more than half of the time, 4) less than half of the time, 5) some of the time, and 6) no time.

The first scores were calculated as the sum of the five answers. They ranged from 5 to 30 and were converted to the WHO-5 well-being index score (0 to 25). The lowest and highest possible qualities of lives scored 0 and 25, respectively, on the WHO-5 well-being index. A score below 13 indicated poor well-being and was a criterion for undergoing a depression test under the International Classification of Disease-10 (ICD-10).¹³

Statistical analysis

Chi-squared tests were performed to analyze subjective health and the WHO-5 well-being statuses for sex, age, education level, monthly income, the presence of chronic illnesses, employment status, number of employees, and working hours per week. Logistic regression analysis was performed to identify the odds ratio (OR) of unhealthy status for subjective health conditions for each variable and the OR of poor well-being status for the WHO-5 well-being index. We stratified the participants by the number of employees, working hours per week, and presence of chronic illness. Multiple logistic regression analysis was performed to adjust for the influence of co-variants to compare the results between self-employed and salaried workers. Statistical significance was set at a p value <0.05. Statistical analyses were performed using the SPSS software (version 24.0; IBM, Corp., Armonk, NY, USA).

RESULTS

Subjective health conditions and WHO-5 well-being index scores according to general characteristics

In the case of subjective health conditions, male evaluated themselves as healthier than female. In terms of age, those in their 40s perceived themselves as healthier, which decreased with age. In terms of educational level, college graduates or above perceived themselves as healthier than high school graduates or below. In terms of monthly income, individuals with higher incomes perceived themselves as healthier. Individuals without chronic illnesses perceived themselves as healthier than those with chronic illnesses. Salaried workers perceived themselves as healthier than self-employed workers, and those working in workplaces with five or more employees perceived themselves as healthier than those working in workplaces with less than five employees. Those working 40 hours or less per week perceived themselves as healthier than those working more than 40 hours per week.

In the case of the WHO-5 well-being index, there was no significant difference according to sex and working hours per week. The remaining variables were similar to subjective health conditions (Table 1).

Table 1. General Characteristics of Study Participants.

Variables		Total (n=2511)	Subjective health conditions			WHO-5 well-being index
			Unhealthy	Healthy	p value	Poor	Good	p value
Sex					<0.001			0.806
	Male	942	287 (30.5)	655 (69.5)		352 (37.4)	590 (62.6)
	Female	1569	619 (39.4)	951 (60.6)		594 (37.9)	975 (62.1)
Age					<0.001			0.001
	40–49.9 years	733	184 (25.1)	549 (74.9)		238 (32.5)	495 (67.5)
	50–59.9 years	1107	382 (34.5)	725 (65.5)		429 (38.8)	678 (61.2)
	≥60 years	671	339 (50.5)	332 (49.5)		279 (41.6)	392 (58.4)
Education level					<0.001			<0.001
	High school graduation or below	1705	697 (40.9)	1008 (59.1)		688 (40.4)	1017 (59.6)
	College graduation or above	806	209 (25.9)	597 (74.1)		258 (32.0)	548 (68.0)
Monthly income (thousand KRW)					<0.001			<0.001
	<2000	679	297 (43.7)	382 (56.3)		306 (45.1)	373 (54.9)
	2000–2990	850	304 (35.8)	546 (64.2)		309 (36.4)	541 (63.6)
	3000–3990	560	185 (33.0)	375 (67.0)		196 (35.0)	364 (65.0)
	4000–7990	422	120 (28.4)	302 (71.6)		135 (32.0)	287 (68.0)
Chronic illness					<0.001			<0.001
	No	2247	706 (31.4)	1541 (68.6)		814 (36.2)	1433 (63.8)
	Yes	264	199 (75.4)	65 (24.6)		132 (50.0)	132 (50.0)
Employment status					<0.001			<0.001
	Salaried workers	862	263 (30.5)	599 (69.5)		272 (31.6)	590 (68.4)
	Self-employed workers	1649	643 (39.0)	1006 (61.0)		673 (40.8)	976 (59.2)
Number of employees					<0.001			0.008
	1–4	1924	735 (38.2)	1189 (61.8)		752 (39.1)	1172 (60.9)
	5–49	587	171 (29.1)	416 (70.9)		194 (33.0)	393 (67.0)
Working hours per week					0.011			0.274
	≤40 hours	757	245 (32.4)	512 (67.6)		273 (36.1)	484 (63.9)
	>40 hours	1754	661 (37.7)	1093 (62.3)		673 (38.4)	1081 (61.6)

Data are presented as n (%). 1000000 KRW ≒ 887 USD ≒ 809 EUR.

Factors associated with subjective unhealthy status and poor well-being status

This study identified the factors associated with subjective unhealthy status (Table 2). Consequently, positive associations with subjective unhealthy status were found for female sex {OR: 1.48 [95% confidence interval (CI) 1.25–1.76]}, older age (compared to 40s) [50–59.9 OR: 1.57 (95% CI 1.27–1.93); ≥60 OR: 3.03 (95% CI 2.42–3.80)], having chronic illness [OR: 6.76 (95% CI 5.04–9.07)], self-employed workers [OR: 1.46 (95% CI 1.23–1.74)], and longer working hours per week (more than 40 hours compared to 40 hours or less) [OR: 1.26 (95% CI 1.05–1.51)]. On the contrary, negative associations were found for higher education level (college graduation or above compared to high school graduation or below) [OR: 0.51 (95% CI 0.42–0.61)], higher monthly income (compared to less than 2000 KRW) [2000–2990 KRW OR: 0.72 (95% CI 0.58–0.88); 3000–3990 KRW OR: 0.63 (95% CI 0.50–0.80); 4000–7990 KRW OR: 0.51 (95% CI 0.39–0.66)], and a larger number of employees (5 to 49 employees compared to 1 to 4 employees) [OR: 0.66 (95% CI 0.54–0.81)].

Table 2. ORs for Subjective Unhealthy Status and Poor Well-Being according to Associated Variables.

Variables		Total (n=2511)	Subjective health conditions	WHO-5 well-being index
			OR (95% CI)	OR 95% CI
Sex
	Male	942	1.00	1.00
	Female	1569	1.48 (1.25–1.76)	1.02 (0.87–1.21)
Age
	40–49.9 years	733	1.00	1.00
	50–59.9 years	1107	1.57 (1.27–1.93)	1.32 (1.08–1.60)
	≥60 years	671	3.03 (2.42–3.80)	1.48 (1.19–1.84)
Education level
	High school graduation or below	1705	1.00	1.00
	College graduation or above	806	0.51 (0.42–0.61)	0.70 (0.58–0.83)
Monthly income (thousand KRW)
	<2000	679	1.00	1.00
	2000–2990	850	0.72 (0.58–0.88)	0.70 (0.57–0.86)
	3000–3990	560	0.63 (0.50–0.80)	0.65 (0.52–0.82)
	4000–7990	422	0.51 (0.39–0.66)	0.57 (0.44–0.74)
Chronic illness
	No	2247	1.00	1.00
	Yes	264	6.76 (5.04–9.07)	1.77 (1.37–2.28)
Employment status
	Salaried workers	862	1.00	1.00
	Self-employed workers	1649	1.46 (1.23–1.74)	1.49 (1.26–1.78)
Number of employees
	1–4	1924	1.00	1.00
	5–49	587	0.66 (0.54–0.81)	0.77 (0.63–0.94)
Working hours per week
	≤40 hours	757	1.00	1.00
	>40 hours	1754	1.26 (1.05–1.51)	1.10 (0.93–1.32)

OR, odds ratio; 95% CI, 95% confidence interval.

1000000 KRW ≒ 887 USD ≒ 809 EUR.

The factors associated with poor well-being (indication for testing for depression under the ICD-10) were similar to the previous results (Table 2). Older age, chronic illness, and self-employed workers were positively associated with poor well-being, whereas a larger number of employees, higher education level, and monthly income were negatively associated. Contrary to subjective unhealthy status, being female and working more than 40 hours per week showed a positive OR for poor well-being, but these were not statistically significant.

Comparison of subjective health conditions by number of employees, working hours per week, and chronic illness

In investigating the association between employment type and subjective unhealthy status across various settings, it was found that self-employed workers with 1 to 4 employees had an OR of 1.40 (95% CI: 1.07–1.82) compared to salaried workers, after adjusting for sex, age, education level, and monthly income. This indicates a positive association between being self-employed and reporting a subjective unhealthy status. For those working 40 hours or less, self-employed workers had an OR of 1.52 (95% CI: 1.08–2.13) for subjective unhealthy status compared to salaried workers, and individuals working for more than 40 hours per week had an OR of 1.46 (95% CI: 1.14–1.88), showing a consistent association between employment type and subjective unhealthy status based on working hours. The OR for subjective unhealthy status among individuals with and without chronic illness was 1.45 (95% CI: 1.18–1.78) and 2.31 (95% CI: 1.21–4.41), respectively, for self-employed workers compared to salaried workers (Table 3).

Table 3. Adjusted ORs for Subjective Unhealthy Status according to Employment Stratified by Number of Employees, Working Hours Per Week, and Chronic Illness.

Variables			Number	Subjective unhealthy status	p value
				Adjusted OR (95% CI)
Number of employees
	1–4				0.015
		Salaried workers	332	1.00
		Self-employed workers	1592	1.40 (1.07–1.82)
	5–49				0.838
		Salaried workers	530	1.00
		Self-employed workers	57	0.93 (0.46–1.88)
Working hours per week
	≤40 hours				0.017
		Salaried workers	468	1.00
		Self-employed workers	288	1.52 (1.08–2.13)
	>40 hours				0.003
		Salaried workers	394	1.00
		Self-employed workers	1361	1.46 (1.14–1.88)
Chronic illness
	No				<0.001
		Salaried workers	783	1.00
		Self-employed workers	1464	1.45 (1.18–1.78)
	Yes				0.011
		Salaried workers	79	1.00
		Self-employed workers	185	2.31 (1.21–4.41)

OR, odds ratio; 95% CI, 95% confidence interval.

Adjusted for sex, age, education level, and monthly income.

Comparison of WHO-5 well-being index by number of employees, working hours per week, and chronic illness

The association between employment status and poor well-being has been examined in various settings. Self-employment and poor well-being status were positively associated among individuals with 1 to 4 employees (OR: 1.64, 95% CI: 1.26–2.14) and 5 to 49 employees (OR: 2.67, 95% CI: 1.40–5.10). Regardless of weekly working hours, self-employed workers had a higher OR for poor well-being status compared to salaried workers (for 40 hours or less: OR: 1.64, 95% CI: 1.18–2.28; for more than 40 hours: OR: 1.71, 95% CI: 1.33–2.19). Self-employed workers had a higher OR for poor well-being status compared to salaried workers, with an OR of 1.60 (95% CI: 1.32–1.94) among individuals without chronic illnesses and a higher OR of 2.01 (95% CI: 1.12–3.61) among individuals with chronic illnesses (Table 4).

Table 4. Adjusted ORs for Poor Well-Being according to Employment Stratified by Number of Employees, Working Hours Per Week, and Chronic Illness.

Variables			Number	Subjective unhealthy status	p value
				Adjusted OR (95% CI)
Number of employees
	1–4				<0.001
		Salaried workers	332	1.00
		Self-employed workers	1592	1.64 (1.26–2.14)
	5–49				0.003
		Salaried workers	530	1.00
		Self-employed workers	57	2.67 (1.40–5.10)
Working hours per week
	≤40 hours				0.003
		Salaried workers	468	1.00
		Self-employed workers	288	1.64 (1.18–2.28)
	>40 hours				<0.001
		Salaried workers	394	1.00
		Self-employed workers	1361	1.71 (1.33–2.19)
Chronic illness
	No				<0.001
		Salaried workers	783	1.00
		Self-employed workers	1464	1.60 (1.32–1.94)
	Yes				0.020
		Salaried workers	79	1.00
		Self-employed workers	185	2.01 (1.12–3.61)

OR, odds ratio; 95% CI, 95% confidence interval.

Adjusted for sex, age, education level, and monthly income.

DISCUSSION

This study aimed to identify the factors affecting the well-being levels of self-employed service/sales workers. Consequently, the younger the age, the higher the education level, and the higher the monthly income, the more adequate the subjective health and well-being status. Additionally, salaried workers had a higher subjective health or well-being status compared to self-employed workers, as well as workers with five or more employees than workers with four or fewer employees. The participants were stratified by the number of employees, working hours per week, and presence of chronic illnesses to compare the differences between self-employed and salaried workers and were reanalyzed. In all cases, except for the subjective health status of workers in workplaces with five or more employees, self-employed workers perceived themselves as unhealthy. Furthermore, in all cases, the well-being status was found to be lower in self-employed workers than in salaried workers.

Previous studies have shown that self-employed workers experience less emotional stress than salaried workers since they have more business discretion and freedom in their work.¹⁴,¹⁵ However, as mentioned in the introduction, mental health disorders are more prevalent among self-employed workers, especially in Korea, where the percentage of small enterprises is high.¹⁶,¹⁷,¹⁸,¹⁹ The percentage of participants in the poor well-being group was 37.3%. Presumably, this high percentage was influenced by involuntary choices of self-employment, stress from self-employment, socioeconomic status, and cultural factors.

In the case of small enterprise ownership, owners and workers handle various administrative and business management tasks. If they launch their own businesses voluntarily, it is assumed that they will have a relatively lower psychological burden regarding administrative tasks and business management, whereas if they launch their own businesses because they cannot find employment, these tasks can be a psychological burden. Studies have shown that the responsibilities assigned to individuals in workplaces with few employees increase, resulting in high stress.²⁰,²¹,²² However, if their business prospers and income increases, they employ people to help with various tasks, and consequently, the business owner’s burden decreases. Thus, subjective well-being or mental health is expected to improve.

One unique finding of this study was that only male’s weekly working hours affected their subjective health status (Supplementary Table 1, only online). This is likely due to female shouldering a greater burden of housework than male in Korean society.²³,²⁴ When working hours are short, male engage in health-promoting activities, such as leisure activities or exercise. Female may not engage in such activities due to the burden of housework and childcare after returning home, even when working for a short time. Accordingly, it is believed that subjective health status does not vary with working hours in female. Additionally, the fact that female have a higher lifetime prevalence of depression than male²⁵ is believed to have an effect. Although these results cannot be generalized, similar patterns are expected in countries with a higher percentage of housework and childcare, such as Korea.

A decline in trade volume and an economic slump, such as interest rate fluctuations or the spread of infectious diseases such as COVID-19, contribute to unemployment. According to data by the World Trade Organization, the trade slump was caused by a decrease in logistics immediately after the COVID-19 outbreak in 2020.²⁶ South Korea, as a country with a high dependence on exports, is more vulnerable to such international events (export to GDP ratio in Korea, Japan, China, and the United States was 38.01%, 17.55%, 19.82%, and 8.02% in 2022).²⁷ In the first half of 2020, when the WHO declared COVID-19 a pandemic, the number of newly self-employed people in Korea increased by 26.8% compared to the first half of 2019.²⁸ This study was analyzed based on the 6th KWCS conducted immediately after the pandemic was declared. Therefore, it is expected to reflect the well-being of small enterprise owners at the beginning of the pandemic. As the pandemic prolongs, the well-being of small enterprise owners is likely to deteriorate further than confirmed in this study. Additional research should be conducted to further identify the factors that may affect the well-being of people who opted for self-employment against their will.

This study has several limitations. First, its cross-sectional design prevented the comparison of well-being before and after transitioning to self-employment. Although it can confirm the relationship between self-employment and decline in well-being, it cannot prove a causal relationship. Second, since the study focused on small-sized self-employed individuals with fewer than 50 employees, it did not include self-employed individuals with more than 50 employees, who are required to have a health manager under the Korean Labor Standards Act. Finally, participants were limited to workers in the service/sales sector; therefore, the results cannot be applied to self-employed workers in other industries.

However, this study analyzed the level of well-being using the WHO-5 well-being index, which is widely used in academia, and we believe that the results obtained were meaningful. Furthermore, although many studies have been conducted on factors affecting the well-being or mental health of self-employed workers in Korea, few have compared the well-being levels of self-employed and salaried workers. Additionally, considering history, the number of involuntary self-employed individuals is expected to increase, especially during economic recessions. Therefore, future research that analyzes pre- and post-COVID-19 periods may help improve the well-being of owners of small enterprises.

SUPPLEMENTARY MATERIAL

Supplementary Table 1

Subjective Unhealthy Status and WHO-5 Well-Being Index according to Working Hours Per Week Stratified by Sex