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Does education matter for the earnings of former entrepreneurs?: Longitudinal evidence using entry and exit dynamics
Jönköping University, Jönköping International Business School, JIBS, Economics. Swedish Entrepreneurship Forum, Stockholm, Sweden; Copenhagen Business School, Department of Strategy & Innovation, Frederiksberg, Denmark.ORCID iD: 0000-0002-3950-931x
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Centre for Family Entrepreneurship and Ownership (CeFEO). Swedish Entrepreneurship Forum, Grevgatan 34,3rd Floor, S-11453 Stockholm, Sweden.;Blekinge Inst Technol, Dept Ind Econ, S-37179 Karlskrona, Sweden..
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Centre for Entrepreneurship and Spatial Economics (CEnSE). Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics. Res Inst Ind Econ IFN, Stockholm, Sweden.ORCID iD: 0000-0001-8752-0428
2022 (English)In: Journal of evolutionary economics, ISSN 0936-9937, E-ISSN 1432-1386, Vol. 32, p. 827-865Article in journal (Refereed) Published
Abstract [en]

Wage employment is the most commonly observed type of employment after a spell of entrepreneurship. The purpose of this paper is to investigate the effects of having been an entrepreneur on earnings after individuals exit. The question is how the entrepreneurship spell influences their value in the labor market? Based on a theoretical framework and earlier literature, our specific interest lies in how these outcomes interact with education level and the nature of the entrepreneurial venture. To investigate this question, we use longitudinal register data on firms and individuals in Sweden. The empirical strategy builds on matching techniques and estimations of earnings equations in a difference-in-differences framework with heterogenous treatment years. We provide evidence that there exists an earnings penalty when highly educated entrepreneurs return to wage employment. This effect is persistent throughout the time period that we observe. For individuals with lower educational attainment, we find no or weak evidence of a wage penalty. Our results suggest that the wage penalty for highly educated individuals operates through the depreciation of specific specialized skills valuable in wage employment.

Place, publisher, year, edition, pages
Springer, 2022. Vol. 32, p. 827-865
Keywords [en]
Earnings, Entrepreneurship exit, Education, Labor Mobility
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-56382DOI: 10.1007/s00191-022-00770-xISI: 000786305200001Scopus ID: 2-s2.0-85128708727Local ID: HOA;;810902OAI: oai:DiVA.org:hj-56382DiVA, id: diva2:1656387
Funder
VinnovaMarianne and Marcus Wallenberg FoundationAvailable from: 2022-05-05 Created: 2022-05-05 Last updated: 2022-09-19Bibliographically approved

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Lappi, EmmaEklund, JohanKlaesson, Johan

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