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Entrepreneurship, Job Creation, and Wage Growth

Author

Listed:
  • Nikolaj Malchow-Møller

    (University of Southern Denmark)

  • Bertel Schjerning

    (Department of Economics, University of Copenhagen)

  • Anders Sørensen

    (Copenhagen Business School)

Abstract

This paper analyses the importance of entrepreneurs for job creation and wage growth. Relying on unique data that cover all establishments, firms and individuals in the Danish private sector, we are able to distil a number of different subsets from the total set of new establishments – subsets which allow us to more precisely capture the "truly new" or "entrepreneurial" establishments than in previous studies. Using these data, we find that while new establishments in general account for one third of the gross job creation in the economy, entrepreneurial establishments are responsible for around 25% of this, and thus only account for about 8% of total gross job creation in the economy. However, entrepreneurial establishments seem to generate more additional jobs than other new establishments in the years following entry. Finally, the jobs generated by entrepreneurial establishments are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages.

Suggested Citation

  • Nikolaj Malchow-Møller & Bertel Schjerning & Anders Sørensen, 2009. "Entrepreneurship, Job Creation, and Wage Growth," CAM Working Papers 2009-01, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    • Handle: RePEc:kud:kuieca:2009_01
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    More about this item

    Keywords

    job creation; entrepreneurial establishments; wage growth;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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