Prior Work Experience and Entrepreneurship: The Careers of Young Entrepreneurs

Nicolas Gendron-Carrier

No 16145, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: I investigate the mechanisms that drive sorting into entrepreneurship and entrepreneurial success among young individuals. I use Canadian matched owner-employeremployee data to conduct my investigation. Empirically, older entrepreneurs and entrepreneurs who have previously worked in high-wage firms tend to do better. To explain these findings, I develop a dynamic Roy model of career choice that features heterogeneous employers, human capital accumulation, and unobserved heterogeneity across individuals. Among other things, I find that prior work experience is particularly valuable for "subsistence" entrepreneurs. I use the estimated model to evaluate policies designed to promote entrepreneurship.

Keywords: dynamic Roy model; career choice; firm heterogeneity; human capital; entrepreneurship; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 L26 (search for similar items in EconPapers)
Pages: 99 pages
Date: 2023-05
New Economics Papers: this item is included in nep-ent, nep-inv, nep-lma and nep-sbm
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Forthcoming - forthcoming in: Journal of Labor Economics

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