Abstract:
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During the last two decades, skill mismatches have become one of the most important issues of
policy concern in the EU (European Commission, 2008). Hence, the literature has stressed the
necessity to reduce skill mismatches. We contribute to this literature by analyzing the impact of
the transition from salaried employment to self-employment on self-reported skill mismatches.
To do so, we resort to the European Community Household Panel (ECHP) covering the period
1994–2001. Using panel data, we track individuals over time and measure their self-reported
skill mismatch before and after the transition. Our empirical findings indicate not only that the
average self-employee is less likely to declare being skill-mismatched but also that those
individuals who transit from salaried employment to self-employment reduce their probability
of skill mismatches after the transition.
Keywords: Self-employment, skill mismatches, salaried employment.
JEL Classification: L26, J24, B23
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