Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1369: Ethnic Background and the Value of Self-Employment Experience: Evidence from a Randomized Field Experiment

Lina Aldén (), Spencer Bastani () and Mats Hammarstedt ()
Additional contact information
Lina Aldén: Department of Economics and Statistic, Linnaeus University
Spencer Bastani: Institute for Evaluation of Labor Market and Education Policy (IFAU), Uppsala, Postal: Linnaeus University, Sweden, and Research Institute for Industrial Economics (IFN), Stockholm, CESifo, Germany,
Mats Hammarstedt: Linneaus University, Postal: and Research Institute of Industrial Economics (IFN), Stockholm, Sweden

Abstract: In this paper, we use a randomized field experiment in Sweden to investigate how self-employment experience is valued in the labor market. We find that self-employment experience negatively impacts the probability of receiving a positive response from employers. For male applicants, this holds regardless of their ethnic background, and independently of whether we consider applicants with experience solely from self-employment, or applicants with a mix of experience from wage-employment and self-employment. For female applicants, the results are less clear-cut. Our findings provide input into the discussion about the impact of self-employment on the chances for natives and immigrants to obtain wage-employment.

Keywords: Self-employment; Wage-employment; Randomized experiment; Discrimination; Labor market outcomes

JEL-codes: J15; J24; J71; L26

24 pages, November 19, 2020

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