Stars and Misfits: Self-Employment and Labor Market Frictions
AbstractRecent evidence has shown that entrants into self-employment are disproportionately drawn from the tails of the earnings and ability distributions. This observation is explained by a multitask model of occupational choice in which frictions in the labor market induce mismatches between firms and workers, and misassignment of workers to tasks. The model also yields distinctive predictions relating prior work histories to earnings and to the probability of entry into self-employment. These predictions are tested with the Korean Labor and Income Panel Study, from which we find considerable support for the model. This paper was accepted by Lee Fleming, entrepreneurship and innovation.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 57 (2011)
Issue (Month): 11 (November)
entrepreneurship; self-employment; jack-of-all-trades; skill complementarity;
Other versions of this item:
- Thomas Astebro & Jing Chen & Peter Thompson, 2010. "Stars and Misfits: Self-Employment and Labor Market Frictions," Working Papers 1003, Florida International University, Department of Economics.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
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- Astebro , Thomas B. & Braunerhjelm, Pontus & Broström , Anders, 2012.
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- Peter Thompson, 2011. "Necessity and Opportunity Entrepreneurs through the Business Cycle," Working Papers 1102, Florida International University, Department of Economics.
- Poschke, Markus, 2013. "The Decision to Become an Entrepreneur and the Firm Size Distribution: A Unifying Framework for Policy Analysis," IZA Discussion Papers 7757, Institute for the Study of Labor (IZA).
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- Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.
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