Small Business Economics

, Volume 47, Issue 2, pp 437–460 | Cite as

Success in entrepreneurship: a complementarity between schooling and wage-work experience

  • Jens Iversen
  • Nikolaj Malchow-Møller
  • Anders Sørensen


What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wage-work experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for non-entrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs.


Complementarity Entrepreneurs Experience Human capital Schooling 

JEL Classifications

I21 J24 J4 L26 



The views expressed in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Executive Board of Sveriges Riksbank. We thank an editor and two referees, Ed Lazear, Steve Machin, Knut Roed, and Jan Rose Skaksen for comments. The usual disclaimer applies. Mikael Bjørk Andersen and Jonas Helth Lønborg provided efficient research assistance. Financial support from the National Agency for Enterprise and Housing and the Tuborg Foundation is gratefully acknowledged.


Financial support from the National Agency for Enterprise and Housing and The Tuborg Foundation is gratefully acknowledged.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflicts of interest.


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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Jens Iversen
    • 1
  • Nikolaj Malchow-Møller
    • 2
  • Anders Sørensen
    • 3
  1. 1.Modelling Division, Monetary Policy DepartmentSveriges RiksbankStockholmSweden
  2. 2.Department of Business and EconomicsUniversity of Southern DenmarkOdense MDenmark
  3. 3.Department of EconomicsCopenhagen Business SchoolFrederiksbergDenmark

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