The imperfect career sorting

Individuals search jobs that fit their preferences (Kristof, 1996; Kristof-Brown, Zimmerman, & Johnson, 2005). Preferences express individuals’ personalities, values, and attitudes (e.g. Holland, 1997), and they are used to assess among several job alternatives and to evaluate job attributes. Drawing on the main assumption that a gap exists between the perceived fit (individuals’ preferences) and the actual fit (jobs), the question that we want to explore is how career preferences translate into employment outcomes. In particular, we look at those reasons that can explain the inconsistency existing between individuals’ ex-ante career preferences and employment sorting.

Katz (1992, p. 30) defines occupational status choice as “the vocational decision process in terms of the individual’s decision to enter an occupation as a wage-or-salaried individual or as a self-employed one.” In this study, we group individuals along their career preferences, and we distinguish individuals who have preferences for a self-employed job, those who have preferences for a job in an established firm and those who do not have career preferences. Being self- employed involves working independently and setting up a business or any activity that implicates

technical and managerial tasks (Lazear, 2005). Moreover, it generally means more autonomy for the individuals and flexibility (McClelland, 1961; Evans & Leighton, 1989). On the other side, working in an established firm means having more occupational safety and higher wages, but less autonomy and very specialized work activities (Oi & Idson, 1999; Sørensen, 2007).

In the next section we provide explanations to discuss the potential sorting of individuals with established firm preferences, self-employed preference and those who do not have career preferences into self-employment versus established firms.

Sorting into self-employment

Building on the person-environment fit theory, we expect that individuals search for those jobs that fit their preferences. For this reason, we expect that individuals with a preference for a self-employed job will actively look for a self-employed job and will be less likely to search for a job in an established firm.

Although individuals with a preference for an established firm would prefer working in an established firm, it may happen that these individuals become self-employed. Sorting into self- employment may be first of all related to the identification of some opportunities to exploit (Eckhardt & Shane, 2003). An entrepreneur is defined as an individual who acts on an opportunity that has been identified and the identification of entrepreneurial opportunities lies at the core of entrepreneurship (McMullen & Shepherd, 2006). In particular, individual’s contextual influences, as the organization characteristics (Audia & Rider, 2006; Dobrev & Barnett, 2005; Freeman, 1986; Sørensen, 2007), and the entrepreneurial activities of peers (Stuart & Ding, 2006; Nanda & Sørensen, 2010; Azoulay et al. 2014) may affect individual entrance into self- employment.

Second, individuals may found that a gap exists between the perceived and the actual attributes of the job in an established firm. Each occupational choice is characterized by a set of attributes, which include, for example, earning, the possibility of making a career, the degree of

autonomy, the importance of creativity, and the social status of the career (Sauermann, 2005). Each occupation can have unlimited attributes that affect the vocational decision, making it potentially complex. Moreover, as P-E theory suggests (e.g. Kristof-Brown and Stevens, 2001), the individual has little leeway in adapting the job to fit his or her needs and preferences. This environmental rigidity is a proper characteristic of the wage work; conversely, self-employed jobs are generally more flexible. Individuals who are unable to adapt their behavior to the environment may decide to seek a new and congruent environment, looking for another job (Holland, 1997).

For those individuals who do not have career preferences at the time of graduation, sorting into a self-employed job can be related to several reasons. First, sorting can be associated with the opportunities or absence of opportunities in the market. Individuals may enter self- employed jobs because they take advantage of an opportunity that they have identified or because they are driven by necessity, meaning that entrepreneurship is the best or the only option to enter the job market (e.g. Davidsson, 2006). A second reason may be related to job attributes. Individuals, who do not have career preferences, may investigate the environment driven only by the value they posit on certain attributes. For example, those who have working experience may be attracted to the self-employed job because they value as important some job attributes that are specific to self-employed jobs, as for example, independence and freedom.

Sorting into established firm

As for those with self-employed preferences, we expect that individuals with a preference for working in an established firm will actively look for that kind of job and will be less likely to search a self-employed job.

However, some individuals with self-employment preferences can also start a career in established firms. Several are the reasons that can explain why preferences for a career are not

order to become self-employed, individuals have to identify an opportunity to exploit and to act upon this opportunity (Eckhardt & Shane, 2003). However, this is not always the case; and the absence of opportunity to exploit can lead individuals to join an established firm rather than start a self-employed job. Another reason can be related to the acquisition of more experience. Individuals who have preferences for self-employed jobs and who do not have working experience may choose to start working in an established firm in order gain experience and acquire resources. Individuals in organizations are exposed to a high amount of information (e.g., Aldrich & Ruef, 2006; Saxenian, 1994), they develop social capital (e.g., Burton et al., 2002; Romanelli & Schoonhoven, 2001) and they acquire skills and knowledge (e.g., Lazear 2004; Shane 2000) that are relevant for starting, for example, an own business. Moreover, organisations foster creativity and innovation at large (Lazear, 2004; Aldrich & Ruef, 2006; Sorenson & Audia, 2000) supporting individuals in the identification of new job opportunities.

Individuals who do not have career preferences may sort into an established firm first of all because of the structure of opportunities, meaning that they are attracted by a particular job offer that fit their preferences for some job attributes or because they have developed, during the time, a stable career preference for a job in an established firm. Finally, for those individuals with preferences for studying, sorting into an established firm can be related again to the presence of an opportunity, like for example a job offer.

With this study we explore why some individuals diverge from their career preferences and which are those drivers that affect this divergence, disclosing the differences existing between the different sorting patterns (Figure 1).

FIGURE 1:

Working Preferences and Job Sorting

3. Method