Does working at a start-up pay off?

Daniel Fackler, Lisa Hölscher, Claus Schnabel and Antje Weyh

No 03/2020, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

Abstract: Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.

Keywords: startups; young firms; wages; linked employer-employee data (search for similar items in EconPapers)
JEL-codes: J31 J63 L26 M51 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ent, nep-eur, nep-hrm, nep-lma and nep-tid
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https://www.econstor.eu/bitstream/10419/214742/1/1691811351.pdf (application/pdf)

Related works:
Journal Article: Does working at a start-up pay off? (2022)
Working Paper: Does Working at a Start-Up Pay Off? (2020)
Working Paper: Does working at a start-up pay off? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwqwdp:032020

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