Labor mobility and entrepreneurship: Who do new firms employ?

Kristina Nyström

No 250, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Entrepreneurship is often claimed to be important for generating employment. However, the empirical evidence on the relationship between entrepreneurship is not always convincing. Most of the studies that analyse the relationship between new firm formation and employment growth perform their analysis on cross-country or regional data. At the micro-level, we still know little about the labour dynamics and re-allocation effects induced by new firm formation. Which role do new firms play regarding labour reallocation? This paper intends to explore the individual and firm characteristics for employees in new Swedish firms. Do new firm start-ups absorb outsiders in the labour market or do they recruit employees from already incumbent firms? The paper use unique matched firm-employees dataset that makes it possible to link new firm formation and information about the individuals employed in these new firms. The empirical results indicate that the individual and firm characteristics associated with employees differ between new and incumbent firms. In particular, the share of immigrants, recently graduated employees and people entering the labor market is slightly higher in new firms. Hence, new firms might play a more important role for outsiders in the labor market.

Keywords: Entrepreneurship; labour mobility; employment (search for similar items in EconPapers)
JEL-codes: L21 L26 L62 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2011-05-24
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-lab, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Chapter: Labor mobility and entrepreneurship: who do new firms employ? (2012)
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