It is well known in personnel economics that firms may improve the quality of their workforce by offering performance pay. We analyze an equilibrium model where worker productivity is private information and show that the firms' gain from worker self-selection may not be matched by a...

We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also employment in partly self-owned limited...