Is Self-employment a Career Trap? A Large-Scale Field Experiment in the Labor Market

Igor Asanov () and Maria Mavlikeeva ()
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Igor Asanov: University of Kassel, Germany
Maria Mavlikeeva: University of Kassel, INCHER, Germany

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: We conduct a large-scale experiment in the labor market using more than 8,000 fictitious resumes to uncover the demand-side mechanisms behind the wage penalty for the self-employed. We find that self-employed individuals, compared to wage earners, are subject to adverse treatment across different occupations. This adverse treatment is concentrated in the lower-skilled, non-managerial market. This differential treatment, conditional on managerial skills, also holds for different occupational levels and increases with the length of self-employment experience. The results suggest that self-employment leads to the development of generalist skills (useful for managerial roles) at the cost of specialist skills.

Keywords: Self-employment; Field experiment; Skills mismatch; Wage penalty; Managerial skills; Specialist skills (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-04-16
New Economics Papers: this item is included in nep-exp and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202513

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