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.
CITATION STYLE
Iversen, J., Malchow-Møller, N., & Sørensen, A. (2016). Success in entrepreneurship: a complementarity between schooling and wage-work experience. Small Business Economics, 47(2), 437–460. https://doi.org/10.1007/s11187-016-9732-y
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