Personality Traits and Beliefs Effects on Self-Employment: Empirical Evidence from the MENA Region

Abstract

This study investigates the effects of personality traits and beliefs, more specifically the internal locus of control (ILC) and religiosity on self-employment in the Middle East and North Africa (MENA) region, controlling for macroeconomic factors. We estimate a two-level logistic regression model using data from the sixth and the seventh waves of the World Values Survey, and combining both individual-level and country-year predictors. The findings reveal multiple conclusions. First, the effect of ILC on the likelihood of self-employment across countries is positive and homogenous. Second, the impact for religiosity on self-employment is heterogenous. It can be positive or negative, contingent to the country and time. The variations in the slope of religiosity are explained by the economic context of the country. Third, religiosity negatively moderates the relationship between ILC and self-employment. Fourth, differences in self-employment across countries are mainly driven by individual-level factors, while country-year variables account only for a small proportion of these variations. Given the MENA region's diverse cultural, social, and economic landscape, this study sheds light on an important yet underexplored research area: the heterogeneous impact of individual and contextual factors on self-employment, a key element of economic growth, and offers valuable theoretical and practical insights and policy recommendations to this unique context.