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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

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  • 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

Suggested Citation

  • Pernilla Andersson Joona & Eskil Wadensjö, 2013. "The best and the brightest or the least successful? Self-employment entry among male wage-earners in Sweden," Small Business Economics, Springer, vol. 40(1), pages 155-172, January.
  • Handle: RePEc:kap:sbusec:v:40:y:2013:i:1:p:155-172 DOI: 10.1007/s11187-011-9365-0
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    2. Vera Rocha & Anabela Carneiro & Celeste Varum, 2015. "Entry and exit dynamics of nascent business owners," Small Business Economics, Springer, vol. 45(1), pages 63-84, June.

    More about this item

    Keywords

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

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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