Small Business Economics

, Volume 36, Issue 1, pp 15–32 | Cite as

Entrepreneurship, job creation and wage growth

  • Nikolaj Malchow-Møller
  • Bertel Schjerning
  • Anders Sørensen
Article

Abstract

This paper analyses the importance of entrepreneurs in terms of job creation and wage growth. Relying on unique data that cover all establishments, firms and individuals in the Danish private sector, we are able to distil a number of different subsets from the total set of new establishments—subsets which allow us to more precisely capture the “truly new” or “entrepreneurial” establishments than has been possible in previous studies. Using these data, we find that while new establishments in general account for one-third of the gross job creation in the economy, entrepreneurial establishments are responsible for around 25% of this, and thus only account for about 8% of total gross job creation in the economy. However, entrepreneurial establishments seem to generate more additional jobs than other new establishments in the years following entry. Finally, the jobs generated by entrepreneurial establishments are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages.

Keywords

Entrepreneurial establishments Job creation Wage growth 

JEL Classifications

L26 J21 J31 

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Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  • Nikolaj Malchow-Møller
    • 1
    • 2
  • Bertel Schjerning
    • 3
  • Anders Sørensen
    • 4
  1. 1.Centre for Economic and Business Research (CEBR)Copenhagen Business SchoolFrederiksbergDenmark
  2. 2.Department of Business and EconomicsUniversity of Southern DenmarkOdense M.Denmark
  3. 3.Department of Economics and Centre for Applied Microeconometrics (CAM)University of CopenhagenCopenhagenDenmark
  4. 4.Department of Economics and Centre for Economic and Business Research (CEBR)Copenhagen Business SchoolFrederiksbergDenmark

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