The Transition to Self-Employment and Perceived Skill-Mismatches: Panel Data Evidence from Eleven EU Countries
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The Transition to Self‑Employment and Perceived Skill‑Mismatches: Panel Data Evidence from Eleven EU Countries Judit Albiol‑Sánchez1 · Luis Diaz‑Serrano1,2 · Mercedes Teruel1 Accepted: 13 October 2020 © Springer Nature B.V. 2020
Abstract Some studies using either objective or subjective indicators, find that self-employed individuals are less likely to be or to report being skill-mismatched in comparison with salaried employees. The aim of this paper is to analyze the impact of the transition from salaried employment to self-employment on self-reported skill mismatches. To do so, this article uses eight waves of the European Community Household Panel covering the period 1994–2001. The panel data nature of this rich dataset, allows us to track individuals over time and measure self-reported skill-mismatches before and after the transition for the same individuals, using as the comparison group those individuals who remain in salaried employment during the whole sample period. Our empirical findings indicate that those individuals who transit from salaried employment to self-employment reduce their probability to report being skill-mismatched after the transition. Interestingly, we also observe that this effect vanish if the transition is done from an unemployment status, and that the effect is quite heterogenous across countries. Keywords Self-employment · Skill mismatches · Salaried employment JEL Classification L26 · J24 · B23
1 Introduction A wide empirical literature has found that the self-employed are more satisfied with their jobs than salaried employees (e.g. Thompson et al. 1992; Blanchflower and Oswald 1998; Blanchflower 2000; Hundley 2001; Benz and Frey 2008a, b; Bradley and Roberts 2004; Noorderhaven et al. 2004; Lange 2012; Binder and Coad 2013). However, job-to-job transitions involve new working conditions that have an impact
* Luis Diaz‑Serrano [email protected] 1
ECO‑SOS, Department D’Economia, Universitat Rovira I Virgili, Av. de la Universitat 1, 43204 Reus, Spain
2
ECEMIN, Universidad Antonio Nebrija, C/ Sta. Cruz de Marcenado 27, 28015 Madrid, Spain
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on the worker–job match. In this sense, while the positive link between the transition from salaried employment to self-employment and job satisfaction is well documented (Binder and Coad 2013; Georgellis and Yusuf 2016), there is no empirical evidence on the impact of the transition to self-employment on the workers’ perception of skills mismatches. This is an important issue because employees’ perceived skill mismatches reduce their motivation and effort, leading to a lower level of productivity (Berlingieri and Erdsiek 2012). This also affects social interaction, psychological outcomes, and generates significant economic and social costs (Allen and Velden 2001). Keeping this in mind and since most individuals who report being skill mismatched are salaried employees (Allen and Velden 2001; Vieira 2005; Millán et al. 2013), we hypothesize that a significant number of employees may o
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