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Entrepreneurial human capital


  • Iversen, Jens

    (Department of Business and Economics)

  • Malchow-Møller, Nikolaj

    () (Department of Business and Economics)

  • Sørensen, Anders

    (Department of Economics)


We argue that formal schooling and wage-work experience are complementary types of human capital for entrepreneurs. Strong empirical support is found for this hypothesis as the interaction term between schooling and actual wage-work experience enters positively and significantly in a Mincer equation, whereas the effect of schooling in the absence of wage-work experience is insignificant. These results are extremely robust towards more flexible specifications, including fixed-effects estimations dealing with unobserved heterogeneity. For wage workers, the interaction term is negligible, confirming that the complementarity is a distinct characteristic of entrepreneurial human capital.

Suggested Citation

  • Iversen, Jens & Malchow-Møller, Nikolaj & Sørensen, Anders, 2009. "Entrepreneurial human capital," Discussion Papers of Business and Economics 4/2009, University of Southern Denmark, Department of Business and Economics.
  • Handle: RePEc:hhs:sdueko:2009_004

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    References listed on IDEAS

    1. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post--secondary Schooling," Economic Journal, Royal Economic Society, vol. 112(482), pages 705-734, October.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    3. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
    4. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
    5. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    6. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, March.
    7. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
    8. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
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    More about this item


    Schooling; experience; complementarity; entrepreneurs;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General


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