Self-Employment Dynamics and the Returns to Entrepreneurship

Abstract

, and Wharton for helpful comments. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Personality Traits of Entrepreneurs: A Review of Recent Literature

“…Over the last decade, however, a stream of work questions whether entrepreneurs actually earn less. The challenges include underreporting of income by entrepreneurs (e.g., Hurst et al, 2014;Sarada, 2016), failure to capture the option value of entrepreneurship and the returns present in future wage employment (e.g., Manso, 2016;Dillon and Stanton, 2016;Galina and Hopenhayn, 2009;, and the failure to separate entrepreneurship into types (e.g., Åstebro et al, 2011;Levine and Rubenstein, 2017;Hegde and Tumlinson, 2016). Kartashova (2014) likewise revisits the private equity premium puzzle and finds it sensitive to the time periods used by Moskowitz and Vissing-Jorgensen (2002).…”

The Right Stuff? Personality and Entrepreneurship

“…43 These findings are presented in Tables S7 and S8 in the appendix. 44 Some recent papers on self-employment model dynamics (Humphries, 2017;Dillon and Stanton, 2018;Hincapié, 2018). While these papers can focus on aspects of self-employment that we do not (e.g., learning), our model handles both information about business ideas and credit constraints more formally, which means our model is well-suited for the types of counterfactuals we perform below.…”

Prior Wage and the Returns to Entrepreneurship

“…Evans & Leighton, 1989;Georgellis, Sessions, & Tsitsianis, 2007;Hamilton, 2000;Levine & Rubinstein, 2017). However, this literature provides an incomplete view of the full set of returns since a substantial share of entrepreneurial spells is only of transitory nature: half of the self-employment spells end within the first 5 years after their inception (Daly, 2015;Dillon & Stanton, 2017;Kaiser & Malchow-Møller, 2011;Manso, 2016).…”