Christian Roessler

Self-employed but looking : a labour market experiment

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.

Firm Formation with Complementarities: The Role of the Entrepreneur

We model entrepreneurship and the emergence of firms as a result of simultaneous bidding for labor services among heterogeneousagents. Unique to our approach is that occupational choices, jobmatching and organizational forms are determined simultaneously, sothat the opportunity costs of entrepreneurs are accounted for. Wefind that (1) individuals who are relatively unmanageable become entrepreneurs; (2) entrepreneurs compete against each other and createvalue by building efficient organizations and offering potentially verywell paid jobs for others; and (3) entry of an additional entrepreneurtypically reduces some individual wages, but always raises the averagewage and depresses the average incomes of incumbent entrepreneurs- strictly so if the new firm partially imitates existing organizations.Our results shed a new light on the role of entrepreneurs in the economy and may be applied to explain low returns to self-employment.

Is More Entrepreneurship Better

We develop a new perspective on the boundary of the firm that is consistent with the empirical observation that the share of entrepreneurs first decreases and then increases in the course of economic development. Existing theory based on transaction costs is difficult to relate to these well-established dynamics. Our approach focuses on changing incentives to specialize and adapt, in order to access complementarities that arise from diverse abilities and access to wealth. We discuss why the efficient number of entrepreneurs is bounded and changes in the course of economic development.

Self-Employed but Looking: A Labor Market Experiment

Empirical studies have shown that entrepreneurs earn, on average, less than the market wage for employees with otherwise similar characteristics. We examine whether having previously been self- emp...

On Distance Metrics in Location Problems

Product space metrics reflect the complementarity of product attributes and lead to different geometries in multidimensional spaces. This matters for optimal product positioning. I consider how a planner should design two substitute public goods with multiple attributes to best serve different needs. Attribute complementarity affects whether a given menu dominates another (using an extension of the Pareto criterion). Distancing the goods proportionately in every attribute guarantees improvement when tastes are maximally diverse. The intuition is that the planner must minimize overlap in the populations the goods serve, since benefits are wasted in appealing to the same individual with two offerings.