Sorting on Unobserved Skills into New Firms

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2018:38

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Mobility, Unemployment, Vacancies, and Immigrant Workers: General ; New Firms; Startups
• Subject: Human capital ; occupational choice ; sorting ; new firms

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Knutsson, Polina
• Event: Veröffentlichung
• (who): Lund University, School of Economics and Management, Department of Economics
• (where): Lund
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/260267
• Last update: 10.03.2025, 11:42 AM CET