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

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  • Lechmann, Daniel S. J.
  • Schnabel, Claus

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 (AER 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 only very limited support for the idea that human capital investment patterns differ between those who become self-employed and those ending up in paid employment.

Suggested Citation

  • Lechmann, Daniel S. J. & Schnabel, Claus, 2011. "Are the self-employed really jacks-of-all-trades? Testing the assumptions and implications of Lazear's theory of entrepreneurship with German data," FAU Discussion Papers in Economics 11/2011, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
  • Handle: RePEc:zbw:iwqwdp:112011
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    Cited by:

    1. Albiol Sanchez, Judit & Diaz-Serrano, Luis & Teruel, Mercedes, 2020. "The Transition to Self-Employment and Perceived Skill-Mismatches: Panel Data Evidence from Eleven EU Countries," IZA Discussion Papers 13764, Institute of Labor Economics (IZA).
    2. Pankaj C. Patel & Yoav Ganzach, 2019. "Returns to balance in cognitive skills for the self-employed: evidence from 18 countries," Small Business Economics, Springer, vol. 52(1), pages 89-109, January.
    3. Anne Spanjer & Arjen van Witteloostuijn, 2017. "The entrepreneur’s experiential diversity and entrepreneurial performance," Small Business Economics, Springer, vol. 49(1), pages 141-161, June.
    4. Krieger, Alexander & Block, Joern & Stuetzer, Michael, 2018. "Skill variety in entrepreneurship: A literature review and research directions," MPRA Paper 88389, University Library of Munich, Germany.
    5. 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.
    6. Colombo, Massimo G. & Piva, Evila, 2020. "Start-ups launched by recent STEM university graduates: The impact of university education on entrepreneurial entry," Research Policy, Elsevier, vol. 49(6).
    7. 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.
    8. 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.
    9. repec:elg:eechap:15413_1 is not listed on IDEAS
    10. 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.
    11. 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.
    12. 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.
    13. Judit Albiol-Sánchez & Luis Diaz-Serrano & Mercedes Teruel, 2021. "The Transition to Self-Employment and Perceived Skill-Mismatches: Panel Data Evidence from Eleven EU Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(3), pages 957-977, February.
    14. Mahé, Clothilde, 2016. "Skills and entrepreneurship: Are return migrants 'Jacks-of-all-trades'?," MERIT Working Papers 2016-071, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. 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.
    16. Rosendahl Huber, Laura & Sloof, Randolph & Van Praag, Mirjam & Parker, Simon C., 2020. "Diverse cognitive skills and team performance: A field experiment based on an entrepreneurship education program," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 569-588.
    17. 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.
    18. 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.
    19. Strohmeyer, Robert & Tonoyan, Vartuhi & Jennings, Jennifer E., 2017. "Jacks-(and Jills)-of-all-trades: On whether, how and why gender influences firm innovativeness," Journal of Business Venturing, Elsevier, vol. 32(5), pages 498-518.
    20. Mahe, Clotilde, 2017. "Occupational choice of return migrants: Is there a 'Jack-of-all-trades' effect?," MERIT Working Papers 2017-039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    21. 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.

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    More about this item

    Keywords

    entrepreneurship; self-employed; Germany;
    All these keywords.

    JEL classification:

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

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