IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v42y2014i1p59-76.html
   My bibliography  Save this article

Are the self-employed really jacks-of-all-trades? Testing the assumptions and implications of Lazear’s theory of entrepreneurship with German data

Author

Listed:
  • Daniel Lechmann

    ()

  • Claus Schnabel

    ()

Abstract

Using a large representative German data set and various concepts of self-employment, this paper tests the “jack-of-all-trades” view of entrepreneurship by Lazear (Am Econ Rev 94(2): 208–211, 2004 ). Consistent with its theoretical assumptions we find that self-employed individuals perform more tasks and that their work requires more skills than that of paid employees. In contrast to Lazear’s assumptions, however, self-employed individuals do not just need more basic but also more expert skills than employees. Our results also provide rather limited support for the idea that human capital investment patterns differ between those who become self-employed and those ending up in paid employment. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Daniel Lechmann & Claus Schnabel, 2014. "Are the self-employed really jacks-of-all-trades? Testing the assumptions and implications of Lazear’s theory of entrepreneurship with German data," Small Business Economics, Springer, vol. 42(1), pages 59-76, January.
  • Handle: RePEc:kap:sbusec:v:42:y:2014:i:1:p:59-76
    DOI: 10.1007/s11187-012-9464-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11187-012-9464-6
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael Stuetzer & Martin Obschonka & Eva Schmitt-Rodermund, 2013. "Balanced skills among nascent entrepreneurs," Small Business Economics, Springer, vol. 41(1), pages 93-114, June.
    2. Joachim Wagner, 2006. "Are nascent entrepreneurs 'Jacks-of-all-trades'? A test of Lazear's theory of entrepreneurship with German data," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2415-2419.
    3. Oliver Hart, 2011. "Thinking about the Firm: A Review of Daniel Spulber's The Theory of the Firm," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 101-113, March.
    4. de Wit, Gerrit, 1993. " Models of Self-Employment in a Competitive Market," Journal of Economic Surveys, Wiley Blackwell, vol. 7(4), pages 367-397, December.
    5. Ari Hyytinen & Pekka Ilmakunnas, 2007. "What distinguishes a serial entrepreneur?," Industrial and Corporate Change, Oxford University Press, vol. 16(5), pages 793-821, October.
    6. Susasnne Zopf & Michael Tiemann, 2010. "BIBB/BAuA-Employment Survey 2005/06," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 130(3), pages 409-420.
    7. Joop Hartog & Mirjam Van Praag & Justin Van Der Sluis, 2010. "If You Are So Smart, Why Aren't You an Entrepreneur? Returns to Cognitive and Social Ability: Entrepreneurs Versus Employees," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(4), pages 947-989, December.
    8. Oliver Hart & John Moore, 2005. "On the Design of Hierarchies: Coordination versus Specialization," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 675-702, August.
    9. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    10. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
    11. Kanbur, S M, 1979. "Of Risk Taking and the Personal Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 769-797, August.
    12. Chihmao Hsieh & Simon C. Parker & C. Mirjam Praag, 2017. "Risk, balanced skills and entrepreneurship," Small Business Economics, Springer, vol. 48(2), pages 287-302, February.
    13. Jolanda Hessels & U. Brixy & Wim Naudé & Thomas Gries, 2014. "Skill Variety, Innovation and New Business Formation," Scales Research Reports H201013, EIM Business and Policy Research.
    14. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    15. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    16. Marco Caliendo & Frank Fossen & Alexander Kritikos, 2014. "Personality characteristics and the decisions to become and stay self-employed," Small Business Economics, Springer, vol. 42(4), pages 787-814, April.
    17. Åstebro, Thomas & Thompson, Peter, 2011. "Entrepreneurs, Jacks of all trades or Hobos?," Research Policy, Elsevier, vol. 40(5), pages 637-649, June.
    18. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    19. Daniel W. Elfenbein & Barton H. Hamilton & Todd R. Zenger, 2010. "The Small Firm Effect and the Entrepreneurial Spawning of Scientists and Engineers," Management Science, INFORMS, vol. 56(4), pages 659-681, April.
    20. Silva, Olmo, 2007. "The Jack-of-All-Trades entrepreneur: Innate talent or acquired skill?," Economics Letters, Elsevier, vol. 97(2), pages 118-123, November.
    21. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
    22. J. Wagner, 2003. "Testing Lazear's jack-of-all-trades view of entrepreneurship with German micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 687-689.
    23. Helsley, Robert W. & Strange, William C., 2011. "Entrepreneurs and cities: Complexity, thickness and balance," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 550-559.
    24. John Schmitt & Nathan Lane, 2009. "An International Comparison of Small Business Employment," CEPR Reports and Issue Briefs 2009-27, Center for Economic and Policy Research (CEPR).
    25. April Mitchell Franco & Darren Filson, 2000. "Knowledge Diffusion through Employee Mobility," Claremont Colleges Working Papers 2000-61, Claremont Colleges.
    26. April Mitchell Franco & Darren Filson, 2006. "Spin‐outs: knowledge diffusion through employee mobility," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 841-860, December.
    27. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
    28. Elisabeth Bublitz & Florian Noseleit, 2011. "The Skill Balancing Act: Determinants of and Returns to Balanced Skills," Jena Economic Research Papers 2011-025, Friedrich-Schiller-University Jena.
    29. Dirk Oberschachtsiek, 2012. "The experience of the founder and self-employment duration: a comparative advantage approach," Small Business Economics, Springer, vol. 39(1), pages 1-17, July.
    30. repec:rje:randje:v:37:y:2006:i:4:p:841-860 is not listed on IDEAS
    31. Uschi Backes-Gellner & Petra Moog, 2007. "Who chooses to become an entrepreneur? The Jacks-of-all-Trades in Social and Human Capital," Working Papers 0076, University of Zurich, Institute for Strategy and Business Economics (ISU).
    32. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    33. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-016-9811-0 is not listed on IDEAS
    2. Silke Tegtmeier & Agnieszka Kurczewska & Jantje Halberstadt, 2016. "Are women graduates jacquelines-of-all-trades? Challenging Lazear’s view on entrepreneurship," Small Business Economics, Springer, vol. 47(1), pages 77-94, June.
    3. Stuetzer, Michael & Obschonka, Martin & Audretsch, David B. & Wyrwich, Michael & Rentfrow, Peter J. & Coombes, Mike & Shaw-Taylor, Leigh & Satchell, Max, 2016. "Industry structure, entrepreneurship, and culture: An empirical analysis using historical coalfields," European Economic Review, Elsevier, vol. 86(C), pages 52-72.
    4. 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.
    5. Albiol, Judit & Díaz Serrano, Lluís & Teruel, Mercedes, 2014. "Is Self-employment a Way to Escape from Skill Mismatches?," Working Papers 2072/247652, Universitat Rovira i Virgili, Department of Economics.
    6. Peter Orazem & Robert Jolly & Li Yu, 2015. "Once an entrepreneur, always an entrepreneur? The impacts of skills developed before, during and after college on firm start-ups," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-27, December.
    7. Mahé, Clothilde, 2016. "Skills and entrepreneurship: Are return migrants 'Jacks-of-all-trades'?," MERIT Working Papers 071, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Jens Iversen & Nikolaj Malchow-Møller & Anders Sørensen, 2016. "Success in entrepreneurship: a complementarity between schooling and wage-work experience," Small Business Economics, Springer, vol. 47(2), pages 437-460, August.
    9. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Graciela, 2015. "Is Self-employment a Way to Escape from Skill Mismatches?," IZA Discussion Papers 9008, Institute for the Study of Labor (IZA).
    10. repec:eee:jbvent:v:32:y:2017:i:5:p:498-518 is not listed on IDEAS
    11. Hårsman, Björn & Mattsson, Lars-Göran, 2017. "Resolving the entrepreneurship puzzle: Applying Fréchet distributions to Lazear’s occupational choice model," Working Paper Series in Economics and Institutions of Innovation 458, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies, revised 22 Feb 2018.
    12. Andrea Asoni & Tino Sanandaji, 2016. "Identifying the effect of college education on business and employment survival," Small Business Economics, Springer, vol. 46(2), pages 311-324, February.
    13. Mahe, Clotilde, 2017. "Occupational choice of return migrants: Is there a 'Jack-of-all-trades' effect?," MERIT Working Papers 039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Johanna Gast & Arndt Werner & Sascha Kraus, 2017. "Antecedents of the small firm effect: the role of knowledge spillover and blocked mobility for employee entrepreneurial intentions," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 277-297, March.
    15. repec:elg:eechap:15413_1 is not listed on IDEAS
    16. Spanjer, Anne & van Witteloostuijn, Arjen, 2017. "The entrepreneur's experiential diversity and entrepreneurial performance," Other publications TiSEM c613c681-b545-4660-ad6a-4, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    Entrepreneurship; Self-employed; Jack-of-all-trades; Germany; J23; J24; L26;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:42:y:2014:i:1:p:59-76. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.