Success in entrepreneurship: a complementarity between schooling and wage-work experience

Jens Iversen, Nikolaj Malchow-Møller and Anders Sørensen
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Jens Iversen: Sveriges Riksbank

Small Business Economics, 2016, vol. 47, issue 2, No 10, 437-460

Abstract: Abstract What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wage-work experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for non-entrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs.

Keywords: Complementarity; Entrepreneurs; Experience; Human capital; Schooling; I21; J24; J4; L26 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11187-016-9732-y

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