Table AII.

PSED variables used to calculate HC

VariableDescriptionPSED II – All waves
Legal entityDummy variable: it takes the value of one if the owner, key not-owner or helper represents a business, financial institution, government agency or other legal entity 
EducationHighest level of education of the owner, key not-owner or helper (1 = up to eighth grade, 2 = some high school, 3 = high school degree/tech. or voc. degree, 4 = some college/comm. college degree, 5 = bachelors degree, 6 = some graduate training, 7 = masters degree, 8 = law, Md, Phd, Edd degree) 
Industry experienceYears of work experience of owner, key not-owner or helper in the industry where the new business is going to compete. Categorical variable from 0 to 6, by year (Y): 0 for 0Y; 1 for 0 < Y < 1; 2 for 1< 
Business helpedNumber of other businesses helped to start by the owner, key not-owner or helper 
Manager experienceYears of owner#’s work experience as a manager or supervisor. Categorial variable from 0 to 6, by year (Y): 0 for 0Y; 1 for 0 < Y < 1; 2 for 1< 
Owners
O_Legalentity *g5_O#
O_Education *h6_O#
O_Industryexperience *h11_O#
O_Business helped *h12_O#
O_Manager experience *h21_O#
Key Not Own.
K_Legalentity *g15_k#
K_Education *m7_k#
K_Industryexperience *m11_k#
K_Business helped *m12_k#
Helpers
H_Legalentity ag20_h#
H_Education an7_h#
H_Industryexperience an11_h#
H_Business helped an12_h#

Notes:

^1: because of the presence of outliers, variables other than dummy or categories are winsorized at 0.01; *stands for the given wave; e.g. for Wave a, we refer to question ag5_O#; for Wave b, question bg5_O#; and so on

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