Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278843 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16145
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
entrepreneurship
human capital
firm heterogeneity
career choice
dynamic Roy model
unobserved heterogeneity
JEL: 
J24
J31
J62
L26
Document Type: 
Working Paper

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