A test of the Jack-of-all-trades theory among the self-employed in Sweden All about balance? A test of the Jack-of-all-trades theory among the self- employed in Sweden

Researchers as well as policymakers often view self-employment as an important factor behind innovation and economic growth and policies that foster self-employment has been on the agenda in several European countries during the last decades. The Jack-of-all-trades theory argues that individuals with a balanced set of skills are more suitable for selfemployment than others. In this paper we test this theory using Swedish Military Enlistment data. This data enables us to construct a measure of balance in endowed abilities that, in comparison to measures used in previous research, is less contaminated by endogeneity problems. Specifically, we measure balance in skills using the result from the tests of cognitive and non-cognitive ability taken at military enlistment. We find clear support for the Jack-of-all-trades theory, in the sense that the likelihood of being self-employed or switching into self-employment is higher for individuals who are more balanced in their in abilities. In addition, earnings from self-employment tend to be higher among individuals with a more balanced set of skills.