Scarred by Failure?

Jeroen Mahieu, Francesca Melillo, Toke Reichstein

Publikation: Bidrag til konferencePaperForskningpeer review

Resumé

Are failed entrepreneurs penalized in the labour market? The answer is yes under certain conditions. Using a novel dataset of matched entrepreneurs and employees in Belgium, we show that: on average, entrepreneurs returning to the labour market after a business failure are penalized, but this effect is most pronounced for those coming from the higher echelons of the wage distribution, and absent for those who earned relatively little before entering self-employment. The penalty is only present for entrepreneurs who fail quickly: entrepreneurs returning to the labour market after 5 or more years do not get penalized. Entrepreneurs who fail fast and move to a new employer limit the wage penalty by changing industry compared to the industry they were venturing in. These results
are consistent with theories of adverse selection in the labour market.
Are failed entrepreneurs penalized in the labour market? The answer is yes under certain conditions. Using a novel dataset of matched entrepreneurs and employees in Belgium, we show that: on average, entrepreneurs returning to the labour market after a business failure are penalized, but this effect is most pronounced for those coming from the higher echelons of the wage distribution, and absent for those who earned relatively little before entering self-employment. The penalty is only present for entrepreneurs who fail quickly: entrepreneurs returning to the labour market after 5 or more years do not get penalized. Entrepreneurs who fail fast and move to a new employer limit the wage penalty by changing industry compared to the industry they were venturing in. These results
are consistent with theories of adverse selection in the labour market.

Konference

KonferenceDRUID Academy Conference 2018
LokationUniversity of Southern Denmark
LandDanmark
ByOdense
Periode17/01/201819/01/2018
Internetadresse

Emneord

  • Entrepreneurship
  • Returns
  • Matching

Citer dette

Mahieu, J., Melillo, F., & Reichstein, T. (2018). Scarred by Failure?. Afhandling præsenteret på DRUID Academy Conference 2018, Odense, Danmark.
Mahieu, Jeroen ; Melillo, Francesca ; Reichstein, Toke. / Scarred by Failure?. Afhandling præsenteret på DRUID Academy Conference 2018, Odense, Danmark.38 s.
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abstract = "Are failed entrepreneurs penalized in the labour market? The answer is yes under certain conditions. Using a novel dataset of matched entrepreneurs and employees in Belgium, we show that: on average, entrepreneurs returning to the labour market after a business failure are penalized, but this effect is most pronounced for those coming from the higher echelons of the wage distribution, and absent for those who earned relatively little before entering self-employment. The penalty is only present for entrepreneurs who fail quickly: entrepreneurs returning to the labour market after 5 or more years do not get penalized. Entrepreneurs who fail fast and move to a new employer limit the wage penalty by changing industry compared to the industry they were venturing in. These resultsare consistent with theories of adverse selection in the labour market.",
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Mahieu, J, Melillo, F & Reichstein, T 2018, 'Scarred by Failure?' Paper fremlagt ved DRUID Academy Conference 2018, Odense, Danmark, 17/01/2018 - 19/01/2018, .

Scarred by Failure? / Mahieu, Jeroen; Melillo, Francesca; Reichstein, Toke.

2018. Afhandling præsenteret på DRUID Academy Conference 2018, Odense, Danmark.

Publikation: Bidrag til konferencePaperForskningpeer review

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KW - Returns

KW - Matching

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Mahieu J, Melillo F, Reichstein T. Scarred by Failure?. 2018. Afhandling præsenteret på DRUID Academy Conference 2018, Odense, Danmark.