Selection into Entrepreneurship, Income Mobility and Firm Performance

Jarkko Harju (), Toni Juuti () and Tuomas Matikka ()
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Jarkko Harju: Tampere University & Finnish Centre of Tax Systems Research (FIT)
Toni Juuti: Labour Institute for Economic Research & Tampere University & FIT
Tuomas Matikka: VATT Institute for Economic Research & FIT

No 41, Working Papers from Finnish Centre of Excellence in Tax Systems Research

Abstract: Using full-population data from Finland, we show that individuals at the top of the income distribution are significantly more likely to start new incorporated businesses. High-income earners also establish more successful and productive businesses than others. In contrast, parental income is not linked with selection into new entrepreneurship or firm-level outcomes. We find that income gains from entrepreneurship are rather similar across individual and parental characteristics, and that entrepreneurship is associated with upward income mobility regardless of initial income levels. Overall, our findings suggest that entrepreneurship can serve as an upward economic ladder for individuals from diverse backgrounds.

Keywords: entrepreneurship; income mobility; productivity (search for similar items in EconPapers)
JEL-codes: J24 J3 L26 (search for similar items in EconPapers)
Pages: 76
Date: 2025-10
New Economics Papers: this item is included in nep-lma and nep-sbm
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Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research

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Persistent link: https://EconPapers.repec.org/RePEc:fit:wpaper:41

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