Material Deprivation, Institutional Trust, and Mental Well-Being: Evidence from Self-Employed Europeans

Abstract

Material deprivation, defined as the inability to afford essential goods and services, is a key determinant of psychological well-being across Europe. While prior research links deprivation to lower well-being and diminished institutional trust, few or no studies to date have examined how trust itself might operate as a mechanism connecting these phenomena in an entrepreneurial context. The current study investigates whether institutional trust mediates the relationship between material deprivation and mental well-being among self-employed individuals across Europe. Drawing on data from the 2016 European Quality of Life Survey (N = 2373), the analysis focuses on the self-employed, a group particularly vulnerable to material insecurity due to limited access to welfare protections. Mental well-being is measured through positive emotions, energy levels, restfulness, and a sense of fulfilment, while institutional trust refers to confidence in government, parliament, the legal system, and local authorities. The results of structural equation modelling show that material deprivation is negatively associated with both institutional trust and mental well-being and that trust partially mediates this link. The findings suggest that when self-employed individuals face material deprivation, reduced trust in public institutions partly explains their lower well-being. This study contributes to entrepreneurial well-being research by highlighting the role of institutional trust as a cognitive belief-based mechanism through which economic insecurity affects mental well-being.