Does entrepreneurship lower the losses associated with labor market mismatching by lowering employment turnover? This paper examines whether a transition to self-employment induces a shift into an individual’s stayer-mover tendency. Using a propensity score-matching technique, the hypothesis is tested on matched employer-employee data from the entire Danish population. The analysis reveals that self-employed stay longer in their employment status compared to individuals in paid-employment. This effect is not explained by reduced attractiveness to the wage sector (lock-in effect). We interpret this finding by crafting a theory in which entrepreneurship may resolve mismatches of individuals in the labor market and may inherently increase the value of non-monetary benefits, namely independence. This counterintuitive finding – self-employment yields greater stability, all else equal – has fundamental implications for the understanding of the returns to entrepreneurship.
|Publication status||Published - 2014|
|Event||The Academy of Management Annual Meeting 2014: The Power of Words - Philadelphia, United States|
Duration: 1 Aug 2014 → 5 Aug 2014
Conference number: 74
|Conference||The Academy of Management Annual Meeting 2014|
|Period||01/08/2014 → 05/08/2014|