Are the Self-Employed Really Jacks-of-All-Trades? Testing the Assumptions and Implications of Lazear's Theory of Entrepreneurship with German Data

28 Pages Posted: 4 Dec 2011

See all articles by Daniel S. J. Lechmann

Daniel S. J. Lechmann

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Abstract

Using a large representative German data set and various concepts of self-employment, this paper tests the "jack-of-all-trades" view of entrepreneurship by Lazear (AER 2004). Consistent with its theoretical assumptions we find that self-employed individuals perform more tasks and that their work requires more skills than that of paid employees. In contrast to Lazear's assumptions, however, self-employed individuals do not just need more basic but also more expert skills than employees. Our results also provide only very limited support for the idea that human capital investment patterns differ between those who become self-employed and those ending up in paid employment.

Keywords: entrepreneurship, self-employed, Germany

JEL Classification: J23, J24

Suggested Citation

Lechmann, Daniel S. J. and Schnabel, Claus, Are the Self-Employed Really Jacks-of-All-Trades? Testing the Assumptions and Implications of Lazear's Theory of Entrepreneurship with German Data. IZA Discussion Paper No. 6157, Available at SSRN: https://ssrn.com/abstract=1968108

Daniel S. J. Lechmann (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Claus Schnabel

University of Erlangen-Nuremberg ( email )

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