Sorting on Unobserved Skills into New Firms
(2018) In Working Papers- Abstract
- Human capital features prominently in theoretical work on post-entry performance of new firms. Empirical analysis has, however, to a large extent overlooked the unobserved component of human capital focusing on years of education or labor market experience. This paper adds to the literature on worker characteristics and post-entry firm performance by putting the unobserved quality of workers in the center of analysis. I find strong evidence that new firms on average employ workers of lower unobserved quality relative to incumbent firms. Among new firms workers of higher unobserved quality are overrepresented in spin-offs and incorporated new firms. I further show that unobserved quality of workers is important for the post-entry... (More)
- Human capital features prominently in theoretical work on post-entry performance of new firms. Empirical analysis has, however, to a large extent overlooked the unobserved component of human capital focusing on years of education or labor market experience. This paper adds to the literature on worker characteristics and post-entry firm performance by putting the unobserved quality of workers in the center of analysis. I find strong evidence that new firms on average employ workers of lower unobserved quality relative to incumbent firms. Among new firms workers of higher unobserved quality are overrepresented in spin-offs and incorporated new firms. I further show that unobserved quality of workers is important for the post-entry performance of firms as it is a strong predictor of new firm survival. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/b261c50e-243d-45de-aa21-cf040216e7b4
- author
- Knutsson, Polina LU
- organization
- publishing date
- 2018
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- Human capital, occupational choice, sorting, new firms, J24, J60, M13
- in
- Working Papers
- issue
- 2018:38
- pages
- 35 pages
- language
- English
- LU publication?
- yes
- id
- b261c50e-243d-45de-aa21-cf040216e7b4
- date added to LUP
- 2018-12-11 10:50:56
- date last changed
- 2024-09-15 00:34:33
@misc{b261c50e-243d-45de-aa21-cf040216e7b4, abstract = {{Human capital features prominently in theoretical work on post-entry performance of new firms. Empirical analysis has, however, to a large extent overlooked the unobserved component of human capital focusing on years of education or labor market experience. This paper adds to the literature on worker characteristics and post-entry firm performance by putting the unobserved quality of workers in the center of analysis. I find strong evidence that new firms on average employ workers of lower unobserved quality relative to incumbent firms. Among new firms workers of higher unobserved quality are overrepresented in spin-offs and incorporated new firms. I further show that unobserved quality of workers is important for the post-entry performance of firms as it is a strong predictor of new firm survival.}}, author = {{Knutsson, Polina}}, keywords = {{Human capital; occupational choice; sorting; new firms; J24; J60; M13}}, language = {{eng}}, note = {{Working Paper}}, number = {{2018:38}}, series = {{Working Papers}}, title = {{Sorting on Unobserved Skills into New Firms}}, url = {{https://lup.lub.lu.se/search/files/195177583/WP18_38.pdf}}, year = {{2018}}, }