Are entrepreneurs penalized during job searches? It depends on who is hiring

Abstract

Research SummaryHow do job‐applicants with entrepreneurship experience—“post‐entrepreneurs”—fare in the wage labor job market? We propose an “entrepreneurship‐experience penalty” generally occurs yet varies in strength depending on the recruiters faced by post‐entrepreneurs in their job application process. In an experiment utilizing the selection‐decisions of 275 recruiters (experimental study participants) in reaction to objectively‐identical job‐applicants' resumes whose differences relate to whether their last‐held job was as a Founder or as an Executive, we found that: (a) resumes of Founders (compared to Executives) are about 23%–29% less likely to be picked as top‐choice for hire, (b) this entrepreneurship penalty is weaker for recruiters with (rather than without) entrepreneurial aspirations, and (c) this recruiter moderator‐effect is stronger for recruiters in smaller (rather than larger) firms.