Abstract
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 language | English |
|---|---|
| Journal | Small Business Economics |
| Volume | 47 |
| Issue number | 2 |
| Pages (from-to) | 437–460 |
| Number of pages | 24 |
| ISSN | 0921-898X |
| DOIs | |
| Publication status | Published - Aug 2016 |
Keywords
- Complementarity
- Entrepreneurs
- Experience
- Human capital
- Schooling