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

Author

Listed:
  • Jens Iversen

    (Sveriges Riksbank)

  • Nikolaj Malchow-Møller

    (University of Southern Denmark)

  • Anders Sørensen

    (Copenhagen Business School)

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.

Suggested Citation

  • Jens Iversen & Nikolaj Malchow-Møller & Anders Sørensen, 2016. "Success in entrepreneurship: a complementarity between schooling and wage-work experience," Small Business Economics, Springer, vol. 47(2), pages 437-460, August.
    • Handle: RePEc:kap:sbusec:v:47:y:2016:i:2:d:10.1007_s11187-016-9732-y
    DOI: 10.1007/s11187-016-9732-y
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    References listed on IDEAS

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    4. Sana Ullah & Babur Wasim Arif & Muhammad Tariq Majeed, 2019. "The Determinants of Firm Survival among Small Cluster Firms," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(1), pages 131-145, Jan-June.
    5. Cheng, Zhiming & Smyth, Russell, 2021. "Education and migrant entrepreneurship in urban China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 506-529.

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