Founders' experience and self-employment duration: the importance of being a ‘jack-of-all-trades‘ ; an analysis based on competing risks

Abstract

"This paper investigates how founders’ experience and professional background affect the duration of periods of self-employment, and to what extent the duration is affected by a balanced skill set in particular. In this context, an occupational choice framework based on a competing risk setting is used that considers an exit choice as a time varying incident. Particularly, a tailor-made variable is used reflecting the balancing property of the individuals’ professional background. The results show that most self-employed individuals find themselves unemployed again. Industrial experience, experience in the service or product, high motivation and professional background as a crafts master are clearly associated with comparative advantages in self-employment. It turns out that a broad range of competences is not sufficient in order to prolong the expected duration. However, a comprehensive set of skills combined with sales/business experience can extend the duration of selfemployment." [authors abstract]