http://repub.eur.nl/res/concept/jel-J24/ Recent publications classified by JEL Code J24 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/39185/ 2013-02-26T00:00:00Z Wealthier individuals engage in healthier behavior. This paper seeks to explain this phenomenon by developing a theory of health behavior, and exploiting both lottery winnings and inheritances to test the theory. We distinguish between the direct monetary cost and the indirect health cost (value of health lost) of unhealthy consumption. The health cost increases with wealth and the degree of unhealthiness, leading wealthier individuals to consume more healthy and moderately unhealthy, but fewer severely unhealthy goods. The empirical evidence presented suggests that differences in health costs may indeed provide an explanation for behavioral differences, and ultimately health outcomes, Kippersluis, J.L.W. van Galama, T.J. http://repub.eur.nl/res/pub/34712/ 2012-07-20T00:00:00Z We study career choice when competition for promotion is a contest. A more meritocratic profession always succeeds in attracting the highest ability types, whereas a profession with superior promotion benefits attracts high types only if the hazard rate of the noise in performance evaluation is strictly increasing. Raising promotion opportunities produces no systematic effect on the talent distribution, while a higher base wage attracts talent only if total promotion opportunities are sufficiently plentiful Morgan, J. Sisak, D. Vardy, F. http://repub.eur.nl/res/pub/37297/ 2012-05-01T00:00:00Z We model entrepreneurship and the emergence of firms as an outcome of simultaneous bidding for labor services among heterogeneous agents. What distinguishes our approach from prior work is that occupational choice and job matching are determined simultaneously, so that the opportunity costs of entrepreneurs are accounted for. Those who are relatively unmanageable, while possibly excellent managers themselves, become entrepreneurs. Entrepreneurs compete and create value by building efficient organizations and offering potentially well-paid jobs to others. While the entry of an additional entrepreneur typically reduces some individual wages, we show that it always raises the average wage and depresses the average income of incumbent entrepreneurs. This result may help explain the empirically low returns to entrepreneurship. Roessler, C. Koellinger, Ph.D. http://repub.eur.nl/res/pub/23503/ 2012-04-01T00:00:00Z In the media role models are increasingly being acknowledged as an influential factor in explaining the reasons for the choice of occupation and career. Various conceptual studies have proposed links between role models and entrepreneurial intentions. However, empirical research aimed at establishing the importance of role models for (nascent) entrepreneurs is scarce. Knowledge of the presence of entrepreneurial role models, their specific functions and characteristics is therefore limited. Our explorative empirical study is a first step towards filling this gap. Our study is based on the outcomes of a questionnaire completed by a representative sample of 292 entrepreneurs in three major Dutch cities – entrepreneurs who have recently started up a business in the retail, hotel and restaurant sectors, business services and other services. We provide indications of the presence and importance of entrepreneurial role models, the function of these role models, the similarity between the entrepreneur and the role model, and the strength of their relationship. Highlights ► Role models emerge as influential factors in individual decision making. ► However, empirical knowledge of entrepreneurial role models is limited. ► We explore impacts, functions and characteristics of entrepreneurial role models. ► We find that role models often influence others in their decision to start a firm. ► Role models tend to be next-door examples and fulfill several functions. Bosma, N. Hessels, S.J.A. Schutjens, V. Praag, M. van Verheul, I. http://repub.eur.nl/res/pub/37701/ 2012-04-01T00:00:00Z Using matched firm-worker data from Danish manufacturing, we observe firm-to-firm worker movements and find that firms that hired workers from more productive firms experience productivity gains one year after the hiring. The productivity gains associated with hiring from more productive firms are equivalent to 0.35 percent per year for an average firm. Surviving a variety of statistical controls, these gains increase with education, tenure, and skill level of new hires, persist for several years after the hiring was done, and remain broadly similar for different industries and measures of productivity. Competing explanations for these gains, knowledge spillovers in particular, are discussed. Stoyanov, A. Zubanov, N.V. http://repub.eur.nl/res/pub/37296/ 2012-02-23T00:00:00Z We model entrepreneurship and the emergence of …rms as an out- come of simultaneous bidding for labor services among heterogeneous agents. What distinguishes our approach from prior work is that oc- cupational choice and job matching are determined simultaneously, so that the opportunity costs of entrepreneurs are accounted for. Those who are relatively unmanageable, while possibly excellent managers themselves, become entrepreneurs. Entrepreneurs compete and create value by building e¢ cient organizations and o¤ering potentially well- paid jobs to others. While the entry of an additional entrepreneur typically reduces some individual wages, we show that it always raises the average wage and depresses the average income of incumbent en- trepreneurs. This result may help explain the empirically low returns to entrepreneurship. Roessler, C. Koellinger, Ph.D. http://repub.eur.nl/res/pub/37308/ 2011-12-22T00:00:00Z Using data from representative population surveys in 17 countries, we find that the lower rate of female business ownership is primarily due to women's lower propensity to start businesses rather than to differences in survival rates across genders. We show that women are less confident in their entrepreneurial skills, have different social networks and exhibit higher fear of failure than men. After controlling for endogeneity, we find that these variables explain a substantial part of the gender gap in entrepreneurial activity. Although, of course, their relative importance varies significantly across countries, these factors appear to have a universal effect. Koellinger, Ph.D. Minniti, M. Schade, C. http://repub.eur.nl/res/pub/25709/ 2011-07-01T00:00:00Z Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs. Delfgaauw, J. Dur, A.J. Propper, C. Smith, S. http://repub.eur.nl/res/pub/22907/ 2011-04-01T00:00:00Z In the media role models are increasingly being acknowledged as an influential factor in explaining the reasons for the choice of occupation and career. Various conceptual studies have proposed links between role models and entrepreneurial intentions. However, empirical research aimed at establishing the importance of role models for (nascent) entrepreneurs is scarce. Knowledge of the presence of entrepreneurial role models, their specific functions and characteristics is therefore limited. Our explorative empirical study is a first step towards filling this gap. Our study is based on the outcomes of a questionnaire completed by a representative sample of 292 entrepreneurs in three major Dutch cities - entrepreneurs who have recently started up a business in the retail, hotel and restaurant sectors, business services and other services. We provide indications of the presence and importance of entrepreneurial role models, the function of these role models, the similarity between the entrepreneur and the role model, and the strength of their relationship. Bosma, N. Hessels, S.J.A. Schutjens, V. Praag, M. van Verheul, I. http://repub.eur.nl/res/pub/22556/ 2011-02-01T00:00:00Z Job satisfaction of self-employed and paid-employed workers is analyzed using the European Community Household Panel for the EU-15 covering the years 1994-2001. We distinguish between two types of job satisfaction, i.e. job satisfaction in terms of type of work and job satisfaction in terms of job security. Findings from our generalized ordered logit regressions indicate that self-employed individuals as compared to paid employees are more likely to be satisfied with their present jobs in terms of type of work and less likely to be satisfied in terms of job security. The findings also provide many insights into the determinants of the two types of job satisfaction for both the self-employed and paid employees Millan, J.M. Thurik, A.R. Hessels, S.J.A. Aguado, R. http://repub.eur.nl/res/pub/20324/ 2010-10-01T00:00:00Z The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient. Delfgaauw, J. Dur, A.J. http://repub.eur.nl/res/pub/20413/ 2010-07-22T00:00:00Z Understanding of the substantial disparity in health between low and high socioeconomic status (SES) groups is hampered by the lack of a suffciently comprehensive theoretical framework to interpret empirical facts and to predict yet untested relations. We present a life-cycle model that incorporates multiple mechanisms explaining (jointly) a large part of the observed disparities in health by SES. In our model, lifestyle factors, working conditions, retirement, living conditions and curative care are mechanisms through which SES, health and mortality are related. Our model predicts a widening and possibly a subsequent narrowing with age of the gradient in health by SES. Galema, T.J. Kippersluis, J.L.W. van http://repub.eur.nl/res/pub/20281/ 2010-07-01T00:00:00Z The validity of family background variables instrumenting education in income regressions has been much criticized. In this paper, we use data of the 2004 German Socio-Economic Panel and Bayesian analysis in order to analyze to what degree violations of the strong validity assumption affect the estimation results. We show that, in case of moderate direct effects of the instrument on the dependent variable, the results do not deviate much from the benchmark case of no such effect (perfect validity of the instrument). The size of the bias is in many cases smaller than the standard error of education’s estimated coefficient. Thus, the violation of the strict validity assumption does not necessarily lead to strongly different results when compared to the strict validity case. This provides confidence in the use of family background variables as instruments in income regressions. Hoogerheide, L.F. Block, J.H. Thurik, A.R. http://repub.eur.nl/res/pub/18349/ 2010-02-26T00:00:00Z Education is a well-known driver of (entrepreneurial) income. The measurement of its influence, however, suffers from endogeneity suspicion. For instance, ability and occupational choice are mentioned as driving both the level of (entrepreneurial) income and of education. Using instrumental variables can provide a way out. However, three questions remain: whether endogeneity is really present, whether it matters and whether the selected instruments make sense. Using Bayesian methods, we find that the relationship between education and entrepreneurial income is indeed endogenous and that the impact of endogeneity on the estimated relationship between educa-tion and income is sizeable. We do so using family background variables and show that relaxing the strict validity assumption of these instruments does not lead to strongly different results. This is an important finding because family background variables are generally strongly correlated with education and are available in most datasets. Our approach is applicable beyond the field of returns to education for income. It applies wherever endogeneity suspicion arises and the three questions become relevant. Block, J.H. Hoogerheide, L.F. Thurik, A.R. http://repub.eur.nl/res/pub/17757/ 2010-01-15T00:00:00Z We are currently investigating genetic influences on self-employment in an international research consortium using genome-wide association studies (GWAS). By meta-analysing results from numerous independent samples we address identification issues arising from multiple testing. To our knowledge, this is the earliest attempt to apply GWAS to an economic outcome of a relatively general nature. Our study will reveal potentials and limitations of this approach for economic research. Loos, M.J.H.M. van der Koellinger, Ph.D. Groenen, P.J.F. Thurik, A.R. http://repub.eur.nl/res/pub/19581/ 2010-01-01T00:00:00Z The recently developed genome-wide association study (GWAS) design enables the identification of genes specifically associated with economic outcomes such as occupational and other choices. This is a promising new approach for economics research which we aim to apply to the choice for entrepreneurship. However, due to multiple testing issues, very large sample sizes are needed to differentiate between true and false positives. For a GWAS on entrepreneurship, we expect that a sample size of at least 30,000 observations is required. Koellinger, Ph.D. Loos, M.J.H.M. van der Groenen, P.J.F. Thurik, A.R. Rivadeneira Ramirez, F. Rooij, F.J.A. van http://repub.eur.nl/res/pub/17491/ 2009-12-03T00:00:00Z We develop a new perspective on the boundary of the firm that is consistent with the empirical observation that the share of entrepreneurs first decreases and then increases in the course of economic development. Existing theory based on transaction costs is difficult to relate to these well-established dynamics. Our approach focuses on changing incentives to specialize and adapt, in order to access complementarities that arise from diverse abilities and access to wealth. We discuss why the efficient number of entrepreneurs is bounded and changes in the course of economic development. Koellinger, Ph.D. Roessler, C. http://repub.eur.nl/res/pub/17090/ 2009-10-01T00:00:00Z Education is argued to be an important driver of the decision to start a business. The measurement of its influence, however, is difficult since it is considered to be an endogenous variable. This study is the first to account for this endogeneity by using an instrumental variables approach. The effect of education on the decision to become self-employed is found to be strongly positive, much higher than the estimated effect in case no instrumental variables are used. That is, the higher the respondent's level of education, the greater the likelihood that he or she starts a business. Implications for method and practice are discussed. Block, J.H. Hoogerheide, L.F. Thurik, A.R. http://repub.eur.nl/res/pub/14740/ 2009-01-01T00:00:00Z We model the emergence of organization forms in a game between prospective entrepreneurs. Complementary roles arise endogenously in a way that admits a stable assignment of workers to firms. This contrasts with existing work on job matching, where stability typically requires workers to be substitutes. Our approach demonstrates that the labor market selection of entrepreneurs and their profit-maximizing choices lead to specific technologies in which certain workers are substitutes and others are complements. We give a simple characterization of equilibrium firm memberships and organizations. We show that payoffs in our non-cooperative solution lie in the core of the corresponding cooperative game, and can be obtained in a decentralized process that reduces information and planning requirements for the entrepreneur. Roessler, C. Koellinger, Ph.D. http://repub.eur.nl/res/pub/14050/ 2008-10-14T00:00:00Z The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always highest in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient. Delfgaauw, J. Dur, A.J.