Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260267 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 2018:38
Publisher: 
Lund University, School of Economics and Management, Department of Economics, Lund
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.
Subjects: 
Human capital
occupational choice
sorting
new firms
JEL: 
J24
J60
M13
Document Type: 
Working Paper

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