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The Role of Education in Self-Employment Success in Finland

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Author Info
Aki Kangasharju

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Abstract

This paper analyzes the effect of self-employed persons' education on the success of their firms during the economic downturn and upturn of the 1990's. It is found that the business cycle affects the relative closure rates of firms run by self-employed with any level of education. Exit probability is lower for the highly educated during bust, but higher in boom. This is accounted for by two facts. First, running a small firm is argued to be a less attractive choice to wage work, particularly for the highly educated, due to lower earning prospects, less stable stream of earnings, and the cultural tradition of working in large corporations. Second, the highly educated faced a higher outside demand for their labor than did the less educated during economic upturn. Finally, it was found that regardless of the state of aggregate economy, firms run by the highly educated have higher growth probabilities than those run by less educated persons. Copyright 2000 Gatton College of Business and Economics, University of Kentucky.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/0017-4815.00188
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Publisher Info
Article provided by Gatton College of Business and Economics, University of Kentucky in its journal Growth and Change.

Volume (Year): 33 (2002)
Issue (Month): 2 ()
Pages: 216-237
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Handle: RePEc:bla:growch:v:33:y:2002:i:2:p:216-237

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association. [Downloadable!]
  2. Hannu Tervo & Mika Haapanen, 2005. "Self-employment duration in urban and rural locations," ERSA conference papers ersa05p315, European Regional Science Association. [Downloadable!]
    Other versions:
  3. Mika Maliranta & Satu Nurmi, 2004. "Analyzing Entrepreneurship with the Finnish Linked Employer-Employee Data (FLEED).Matching and qualitative properties of the data," Discussion Papers 920, The Research Institute of the Finnish Economy. [Downloadable!]
  4. Mika Maliranta & Satu Nurmi, 2004. "Do Foreign Players Change the Nature of the Game Among Local Entrepreneurs?," Discussion Papers 942, The Research Institute of the Finnish Economy. [Downloadable!]
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This page was last updated on 2009-12-18.

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