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The best and the brightest or the least successful? Self-employment entry among male wage-earners in Sweden

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  • Pernilla Andersson Joona

    ()

  • Eskil Wadensjö

Abstract

This paper analyzes self-employment entry among Swedish-born male wage-earners. Is it the best and the brightest or the least successful that become self-employed? The residual from an income regression is used as an indicator of who belongs to which group. We find that both wage-earners who receive a lower income than predicted, i.e. have a negative residual, and those who receive a higher income than predicted, i.e. have a positive residual, are more likely to become self-employed than those who receive an income close to the predicted one. However, splitting self-employment into different types depending on corporate form and number of employees, we find that the self-employed are drawn from both tails of the residual distribution only if it is a matter of unincorporated firms. Wage-earners who become self-employed and start an incorporated firm are only drawn from the top of the residual distribution. Using self-employment income and turnover as measures of self-employment performance, we find a positive linear relationship between the income residual and performance. Copyright Springer Science+Business Media, LLC. 2013

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 40 (2013)
Issue (Month): 1 (January)
Pages: 155-172

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Handle: RePEc:kap:sbusec:v:40:y:2013:i:1:p:155-172

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Web page: http://www.springerlink.com/link.asp?id=100338

Related research

Keywords: Self-employment entry; Entrepreneurship; Occupational choice; Occupational mobility; Self-employment performance; J24; J62; L25; L26;

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References

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  1. Davidsson, Per & Henrekson, Magnus, 2002. " Determinants of the Prevalence of Start-Ups and High-Growth Firms," Small Business Economics, Springer, vol. 19(2), pages 81-104, September.
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  4. Henrekson, Magnus, 2002. "Entrepreneurship: A Weak Link in the Welfare State," Working Paper Series in Economics and Finance 518, Stockholm School of Economics, revised 04 Mar 2005.
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  8. von Greiff, Jenny, 2009. "Displacement and self-employment entry," Labour Economics, Elsevier, vol. 16(5), pages 556-565, October.
  9. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
  10. Jeff Borland & Jenny Lye, 1996. "Matching and mobility in the market for Australian rules football coaches," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 143-158, October.
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Cited by:
  1. Simoes, Nadia & Moreira, Sandrina B. & Crespo, Nuno, 2013. "Individual Determinants of Self-Employment Entry – What Do We Really Know?," MPRA Paper 48403, University Library of Munich, Germany.

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