Stars and Misfits: Self-Employment and Labor Market Frictions

Thomas Astebro, Jing Chen () and Peter Thompson ()
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Jing Chen: Department of Innovation and Organizational Economics, Copenhagen Business School, 2000 Frederiksberg, Denmark

Management Science, 2011, vol. 57, issue 11, 1999-2017

Abstract: Recent evidence has shown that entrants into self-employment are disproportionately drawn from the tails of the earnings and ability distributions. This observation is explained by a multitask model of occupational choice in which frictions in the labor market induce mismatches between firms and workers, and misassignment of workers to tasks. The model also yields distinctive predictions relating prior work histories to earnings and to the probability of entry into self-employment. These predictions are tested with the Korean Labor and Income Panel Study, from which we find considerable support for the model. This paper was accepted by Lee Fleming, entrepreneurship and innovation.

Keywords: entrepreneurship; self-employment; jack-of-all-trades; skill complementarity (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (94)

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http://dx.doi.org/10.1287/mnsc.1110.1400 (application/pdf)

Related works:
Working Paper: Stars and Misfits: Self-Employment and Labor Market Frictions (2011)
Working Paper: Stars and Misfits: Self-Employment and Labor Market Frictions (2010)
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