How valuable are cognitive and social abilities for entrepreneurs’ incomes as compared to employees? We answer three questions: (1) To what extent does a composite measure of ability affect an entrepreneur's earnings relative to employees? (2) Do different cognitive abilities (e.g. math...

There is no robust empirical support for the effect of financial incentives on the decision to work in self-employment rather than as a wage earner. In the literature, this is seen as a puzzle. We offer a focus on the opportunity cost, i.e. the wages given up as an employee. Information on...

During the last two decades, skill mismatches have become one of the most important issues of policy concern in the EU (European Commission, 2008). Hence, the literature has stressed the necessity to reduce skill mismatches. We contribute to this literature by analyzing the impact of the...