Success in Entrepreneurship: A Complementarity Between Schooling and Wage-Work Experience

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What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wage-work experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for non-entrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs.
Original languageEnglish
JournalSmall Business Economics
Issue number2
Pages (from-to)437–460
Number of pages24
Publication statusPublished - Aug 2016


  • Complementarity
  • Entrepreneurs
  • Experience
  • Human capital
  • Schooling

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