The Skill Balancing Act: Determinants of and Returns to Balanced Skills
Entrepreneurs are found to have balanced skill sets and most have worked in small firms before starting their own business. In light of this, we compare the skill sets of employees working in businesses of different size to the skill sets of entrepreneurs using a rich data set on the applied skills of individuals. This data set allows us to construct an indicator that measures skill balance in the uantity (skill scope) and quality (skill level) dimension. Our results show that employees working in large businesses tend to have a lower skill balance than those working in small businesses; yet, the skill balance of entrepreneurs remains the largest. The impact of human capital formation on skill balance also varies among employees of different business sizes and entrepreneurs. Finally, the estimated returns to balanced skills are largest for entrepreneurs whereas, for employees, these returns decrease as business size increases. However, we find no relationship between balancing skills at lower skill levels and income, indicating that both dimensions - skill level and skill scope - are relevant. We end by discussing the policy implications that can be drawn from our results in regard to skill balance.
|Date of creation:||07 Jun 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +049 3641/ 9 43000
Fax: +049 3641/ 9 43000
Web page: http://www.jenecon.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
- Uschi Backes-Gellner & Simone Tuor & Daniela Wettstein, 2010. "Differences between entrepreneurs and employees in their educational paths," Economics of Education Working Paper Series 0050, University of Zurich, Institute for Strategy and Business Economics (ISU).
- 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.
- Ljubica Nedelkoska & Frank Neffke, 2010. "Human Capital Mismatches along the Career Path," Jena Economic Research Papers 2010-051, Friedrich-Schiller-University Jena.
- Hartog, Joop & van Praag, Mirjam C. & van der Sluis, Justin, 2008.
"If You Are So Smart, Why Aren't You an Entrepreneur? Returns to Cognitive and Social Ability: Entrepreneurs versus Employees,"
IZA Discussion Papers
3648, Institute for the Study of Labor (IZA).
- 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.
- Joop Hartog & Mirjam van Praag & Justin van der Sluis, 2008. "If you are so smart, why aren't you an entrepreneur? Returns to cognitive and social ability: Entrepreneurs versus employees," Jena Economic Research Papers 2008-084, Friedrich-Schiller-University Jena.
- Silva, Olmo, 2006.
"The Jack-of-All-Trades Entrepreneur: Innate Talent or Acquired Skill?,"
IZA Discussion Papers
2264, Institute for the Study of Labor (IZA).
- Silva, Olmo, 2007. "The Jack-of-All-Trades entrepreneur: Innate talent or acquired skill?," Economics Letters, Elsevier, vol. 97(2), pages 118-123, November.
- Ari Hyytinen & Mika Maliranta, 2008. "When Do Employees Leave Their Job for Entrepreneurship?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 1-21, 03.
- Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
- Parker, Simon C, 2009. "Why do small firms produce the entrepreneurs?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 484-494, June.
When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2011-025. 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: (Markus Pasche)
If references are entirely missing, you can add them using this form.