Self-Employed but Looking: A Labor Market Experiment

Abstract

Empirical studies have shown that entrepreneurs earn, on average, less than the market wage for employees with otherwise similar characteristics. We examine whether having previously been self- employed is in itself a negative signal have that job market. In that field experiment where two applications of that equally qualified individuals were sent entrepreneurs entrepreneurs same vacancies, we find on a systematically receive fewer responses than non- entrepreneurs. Thus, it appears the the earnings differential the partially explained by the fact the for do not otherwise access to We reference jobs is practice. in discuss what type of unfavorable information self-employment may carry.