We examine whether having previously been self-employed is a negative signal on the job market. In a UK field experiment where two applications of otherwise equally qualified individuals were sent out in response to the same vacancies in human resource management, we find that entrepreneurs systematically receive fewer responses than non-entrepreneurs. Empirical studies that treat market wages as the opportunity cost of remaining self-employed are therefore likely to overestimate alternative earnings to entrepreneurship.

discrimination, entrepreneurial incomes, natural field experiment, occupational choice, self-employment
Field Experiments (jel C93), Job, Occupational, and Intergenerational Mobility (jel J62), Discrimination (jel J71), Entrepreneurship (jel L26), Business Administration and Business Economics; Marketing; Accounting: General (jel M00), Firm Employment Decisions; Promotions (hiring, firing, turnover, part-time, temporary workers, seniority issues) (jel M51)
Erasmus Research Institute of Management
ERIM Report Series Research in Management
Erasmus Research Institute of Management

Koellinger, Ph.D, Mell, J.N, Pohl, I, Roessler, C, & Treffers, T. (2012). Self-Employed but Looking: A Labor Market Experiment (No. ERS-2012-022-ORG). ERIM Report Series Research in Management. Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/38004