How valuable are cognitive and social abilities for entrepreneurs' incomes as compared to employees? We answer three questions: (1) To what extent does a composite measure of ability affect an entrepreneur's earnings relative to employees? (2) Do different cognitive abilities (e.g. math ability,...

Many contributions suggest that earnings instability has increased during the 1980s and1990s. This paper develops and estimates an on-the-job search model of the labor market tostudy the contribution of wage inequality and job mobility in explaining earnings instability. Tostudy the evolution...