Unpredictably Stable: An Investigation into the Stayer-Mover Tendencies

Virgilio Failla, Francesca Melillo, Toke Reichstein

    Research output: Contribution to conferencePaperResearchpeer-review


    Does entrepreneurship lower individuals? employment turnover rates? The paper offers two reasons why this is the case - a matching mechanism and a lock-in effect. The paper offers theoretical justifications and seeks to empirically disentangle the two mechanisms. A matched employer-employee data covering the entire Danish labor force warrants the identification of a matched sample of entrepreneurs and non-entrepreneurs useful for rigorous analysis. The analysis reveals that self-employed stay longer in their employment status compared to individuals in paid-employment. This is
    shown to be likely due to reduced attractiveness in the wage sector and sunk costs related lock-in effects. Results, however, also indicate that entrepreneurship may resolve mismatches of individuals in the labor market. This counterintuitive finding - self-employment yields greater employment stability - has fundamental implications for the understanding of the returns (labor market outcomes) to entrepreneurship.
    Original languageEnglish
    Publication date2014
    Number of pages37
    Publication statusPublished - 2014
    EventThe DRUID Society Conference 2014: Entrepreneurship - Organization - Innovation - Copenhagen Business School, Frederiksberg, Denmark
    Duration: 16 Jun 201418 Jun 2014
    Conference number: 36


    ConferenceThe DRUID Society Conference 2014
    LocationCopenhagen Business School
    Internet address

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