Selection into Entrepreneurship and Self-Employment

Ross Levine () and Yona Rubinstein

No 25350, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the effects of ability and liquidity constraints on entrepreneurship. We develop a three sector Roy model that differentiates between entrepreneurs and other self-employed to address puzzling gaps that have emerged between theory and evidence on entry into entrepreneurship. The model predicts—and the data confirm—that entrepreneurs are positively selected on highly-remunerated human capital, but other self-employed are negatively selected on those same abilities; entrepreneurs are positively selected on collateral, but other self-employed are not; and entrepreneurship is procyclical, but self-employment is countercyclical.

JEL-codes: E32 J24 L26 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-ent, nep-lma, nep-mac and nep-sbm
Note: EFG PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Related works:
Working Paper: Selection into entrepreneurship and self-employment (2020)
Working Paper: SELECTION INTO ENTREPRENEURSHIP AND SELF-EMPLOYMENT (2020)
Working Paper: Selection into entrepreneurship and self-employment (2020)
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