Most of the research that I found has an economic perspective. I am looking for organizational behavior or psychological explanations for exiting self-employment.
The most important thing is how the individual handles the risk and perceives the risk. Sometimes an interesting ambivalence exists. I led a company for five years ($50 million revenue/year) and made plenty of serious decisions, in spite of that I have never started my own enterprise. I funded companies and made significant business developments using the owners' capital. We were successful, doubled the shareholder value. I think the perceived risk of being independent was too high to start a private company.
There is also a rational factor the equity you have behind. If you are a capable person without capital, you can have a higher impact, more success, and more income by joining to an existing company than start your own. Also, sometimes the entering barrier is huge. What is my negotiation power as an individual with limited knowledge, capacity, and equity? How can I manage my supply chains?
There are innovative ideas; businesses can run on low equity, even grow very fast (e.g. online retailing). There are others less innovative, need a lot of cash, cannot grow fast. If you pursued your knowledge and experience in the second one, you have higher chance to work for somebody.
Legal environment and local culture can be a barrier for enterprises as well. Family, children also influence your decision.
From the other perspective, giving up your own business to work for somebody can be based on somewhat similar reasons.
The enlisted factors were important for me, so this is rather an opinion than a scientific reasoning.
I forget one more reason. I was a minority owner of my last company and sold my shares because I was burnt out, and decided to have a science career when I was 42. So, instead of working for myself, I started to work in the academy.
Sometimes, amidst the stress of multiple converging deadlines and the endless hustle to obtain new clients, it can be hard to remember why we chose to become self-employed in the first place. When you’re self-employed, you no longer have a “higher-up” governing your every move. You control how your work is done. Your client has a say in the final product, but that’s it, their power ends there. How you get from point A to point B is completely up to you and that is awesome. But apart from those benefits most of self-employed leave their employment to take a regular job with someone else. The most important reason is how someone takes calculated risks caused by policy changes in their places.
I will share my experience on this. Before I went into self-employment I worked successfully in different job posts including economist, trade, planning and investment in government institutions for more than 6 years. Currently I am self-employed in a consulting firm with 5 employees, but yet I am finding a well structured organization to be employed the reason of quieting self-employment [Consulting Firm] is because now I am not getting much money because of increasing number of higher learning institutions which is part of their primary duties, secondly is the changed national legal environmental (policies) and lastly due to increased family size who demand more service from me.
Some of the data and research on entrepreneurs and small business owners reveal the relatively well-known challenges of work interfering with family (WIF), general managerial stress, lack of ability to take vacation time, paid vacation time along with other regular company/organization employee benefits, health insurance and so on. Some of these overlap with the economic perspectives you mentioned, which may then be likely related to the psychological and OB explanations for exiting self-employment. I am not sure that economic and psych/OB reasons for exiting can be completely separated. Previous data sets that examine aspects of entrepreneurial success often mention the challenges of self-employment, which could be linked to exiting. Career life-cycle, changing technology, increased competition, changing consumer and societal preferences, and some individual and cultural greater respect for traditional organizational employment over self-employment may also be likely reasons. There are probably published studies and related data sets that could be used to cull and synthesize the exiting aspects that you are looking for.
Article Aspects of entrepreneurial success
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