Entrepreneurship and Regional Windfall Gains: Evidence from the Spanish Christmas Lottery

Personal Wealth and Self-Employment

“…Exploiting this significant overlap, we re-weight our analysis to match the national representative sample characteristics (age, income and credit score) and we find similar results, providing support for the applicability of our estimates to a broader sample. Therefore, our results complement contemporaneous work that focuses on how windfalls affect individuals in specific samples such as lottery winners (Mikhed, Raina, and Scholnick (2019)), or in other countries (Bermejo et al (2019)), or localized area shocks (Decker, McCollum, and Upton Jr. (2018)).…”

“…Much prior literature equates self-employment with a desire to be entrepreneurial (e.g., Glaeser (2007)). If entrepreneurship is the objective of a self-employment spell, then drivers of self-employment can include personal characteristics, such as confidence, risk-tolerance, and abilities (e.g., Kihlstrom and Laffont (1979); Lazear (2004); Puri and Robinson (2007); Andersen and Nielsen (2012); Hvide and Panos (2014);De Meza et al (2019)), as well as rational responses to demand shocks and labor market restructuring (e.g., Bernstein et al (2018); Bermejo et al (2019); Kleiner and Hacamo (2019); Babina (2020)). However, recent work augments prior literature by showing that many self-employed do not aspire to be entrepreneurs (in the classical sense) and instead enjoy the non-pecuniary benefits of business ownership (Hurst and Pugsley (2011)).…”

Personal Wealth and Self-Employment

“…Much prior literature equates self-employment with a desire to be entrepreneurial (e.g., Glaeser (2007)). If entrepreneurship is the objective of a self-employment spell, then drivers of self-employment can include personal characteristics, such as confidence, risk-tolerance, and abilities (e.g., Kihlstrom and Laffont (1979); Lazear (2004); Puri and Robinson (2007); Andersen and Nielsen (2012); Hvide and Panos (2014);De Meza et al (2019)), as well as rational responses to demand shocks and labor market restructuring (e.g., Bernstein et al (2018); Bermejo et al (2019); Kleiner and Hacamo (2019); Babina (2020)). However, recent work augments prior literature by showing that many self-employed do not aspire to be entrepreneurs (in the classical sense) and instead enjoy the non-pecuniary benefits of business ownership (Hurst and Pugsley (2011)).…”

Liquidity Constraints, Cash Windfalls, and Entrepreneurship: Evidence from Administrative Data on Lottery Winners

“…7 Instead of using lottery winnings at the individual level, Bermejo et al (2020) exploits regional variations in cash windfalls generated by the Spanish Christmas Lottery to examine the effect of transitory shocks to local income on firm creation and job creation by startups. creation (i.e., high/low industries or incorporated/unincorporated businesses) and help us verify the potential mechanisms behind our findings.…”