Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Recent studies comparing lifetime earnings of individuals with and without entrepreneurial experience have chal-lenged the previously stylized fact that entrepreneurship yields lower and riskier earnings. We contribute to the ex-tant understanding of the relationship between entrepreneurial experience and lifetime earnings in three ways. First, we analyze the role of the timing of entrepreneurship within a professional career by exploring whether entrepreneur-ship influences lifetime earnings differently when it happens at the beginning of the career rather than later. Second, we add to the topic of the value of experimenting in entrepreneurship by considering the relationship between the duration of the entrepreneurial spell and lifetime earnings. Last, we focus exclusively on university graduates, which represent a part of the population with high entrepreneurial potential. Using register data from the population of Denmark, we compare lifetime earnings of graduates who start their careers as entrepreneurs (“early entrepreneurs”), graduates who start as wage-employees but become entrepreneurs later in their careers (“late entrepreneurs”), and graduates who never become entrepreneurs (“never entrepreneurs”). Thanks to the richness of our data, we are able to track the careers and earnings of such graduates during their first 15 years in the labor market. Results from matched samples show an interesting picture. Consistent with recent research, a premium for individuals who ever become entrepreneurs is also present in our sample. Importantly, we find that early entrepreneurs are better-off than never entrepreneurs when they switch quickly to wage-employment after a brief experimentation period in entrepre-neurship, or when they are able to run long-lived successful firms. However, attempting entrepreneurship later in the career seems to be the best alternative in terms of risk-reward. Several mechanisms driving these results as well as their potential implications are further discussed.
Original languageEnglish
Publication date2018
Number of pages35
Publication statusPublished - 2018
EventThe Academy of Management Annual Meeting 2018: Improving Lives - Chicago, United States
Duration: 10 Aug 201814 Aug 2018
Conference number: 78
http://aom.org/annualmeeting/

Conference

ConferenceThe Academy of Management Annual Meeting 2018
Number78
CountryUnited States
CityChicago
Period10/08/201814/08/2018
Internet address

Bibliographical note

CBS Library does not have access to the material

Cite this

Mérida, A. L., & Rocha, V. (2018). Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings. Paper presented at The Academy of Management Annual Meeting 2018, Chicago, United States.
Mérida, Adrián L. ; Rocha, Vera. / Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings. Paper presented at The Academy of Management Annual Meeting 2018, Chicago, United States.35 p.
@conference{597b678c353c4e5a9121135467255a89,
title = "Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings",
abstract = "Recent studies comparing lifetime earnings of individuals with and without entrepreneurial experience have chal-lenged the previously stylized fact that entrepreneurship yields lower and riskier earnings. We contribute to the ex-tant understanding of the relationship between entrepreneurial experience and lifetime earnings in three ways. First, we analyze the role of the timing of entrepreneurship within a professional career by exploring whether entrepreneur-ship influences lifetime earnings differently when it happens at the beginning of the career rather than later. Second, we add to the topic of the value of experimenting in entrepreneurship by considering the relationship between the duration of the entrepreneurial spell and lifetime earnings. Last, we focus exclusively on university graduates, which represent a part of the population with high entrepreneurial potential. Using register data from the population of Denmark, we compare lifetime earnings of graduates who start their careers as entrepreneurs (“early entrepreneurs”), graduates who start as wage-employees but become entrepreneurs later in their careers (“late entrepreneurs”), and graduates who never become entrepreneurs (“never entrepreneurs”). Thanks to the richness of our data, we are able to track the careers and earnings of such graduates during their first 15 years in the labor market. Results from matched samples show an interesting picture. Consistent with recent research, a premium for individuals who ever become entrepreneurs is also present in our sample. Importantly, we find that early entrepreneurs are better-off than never entrepreneurs when they switch quickly to wage-employment after a brief experimentation period in entrepre-neurship, or when they are able to run long-lived successful firms. However, attempting entrepreneurship later in the career seems to be the best alternative in terms of risk-reward. Several mechanisms driving these results as well as their potential implications are further discussed.",
author = "M{\'e}rida, {Adri{\'a}n L.} and Vera Rocha",
note = "CBS Library does not have access to the material ; null ; Conference date: 10-08-2018 Through 14-08-2018",
year = "2018",
language = "English",
url = "http://aom.org/annualmeeting/",

}

Mérida, AL & Rocha, V 2018, 'Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings' Paper presented at, Chicago, United States, 10/08/2018 - 14/08/2018, .

Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings. / Mérida, Adrián L.; Rocha, Vera.

2018. Paper presented at The Academy of Management Annual Meeting 2018, Chicago, United States.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings

AU - Mérida, Adrián L.

AU - Rocha, Vera

N1 - CBS Library does not have access to the material

PY - 2018

Y1 - 2018

N2 - Recent studies comparing lifetime earnings of individuals with and without entrepreneurial experience have chal-lenged the previously stylized fact that entrepreneurship yields lower and riskier earnings. We contribute to the ex-tant understanding of the relationship between entrepreneurial experience and lifetime earnings in three ways. First, we analyze the role of the timing of entrepreneurship within a professional career by exploring whether entrepreneur-ship influences lifetime earnings differently when it happens at the beginning of the career rather than later. Second, we add to the topic of the value of experimenting in entrepreneurship by considering the relationship between the duration of the entrepreneurial spell and lifetime earnings. Last, we focus exclusively on university graduates, which represent a part of the population with high entrepreneurial potential. Using register data from the population of Denmark, we compare lifetime earnings of graduates who start their careers as entrepreneurs (“early entrepreneurs”), graduates who start as wage-employees but become entrepreneurs later in their careers (“late entrepreneurs”), and graduates who never become entrepreneurs (“never entrepreneurs”). Thanks to the richness of our data, we are able to track the careers and earnings of such graduates during their first 15 years in the labor market. Results from matched samples show an interesting picture. Consistent with recent research, a premium for individuals who ever become entrepreneurs is also present in our sample. Importantly, we find that early entrepreneurs are better-off than never entrepreneurs when they switch quickly to wage-employment after a brief experimentation period in entrepre-neurship, or when they are able to run long-lived successful firms. However, attempting entrepreneurship later in the career seems to be the best alternative in terms of risk-reward. Several mechanisms driving these results as well as their potential implications are further discussed.

AB - Recent studies comparing lifetime earnings of individuals with and without entrepreneurial experience have chal-lenged the previously stylized fact that entrepreneurship yields lower and riskier earnings. We contribute to the ex-tant understanding of the relationship between entrepreneurial experience and lifetime earnings in three ways. First, we analyze the role of the timing of entrepreneurship within a professional career by exploring whether entrepreneur-ship influences lifetime earnings differently when it happens at the beginning of the career rather than later. Second, we add to the topic of the value of experimenting in entrepreneurship by considering the relationship between the duration of the entrepreneurial spell and lifetime earnings. Last, we focus exclusively on university graduates, which represent a part of the population with high entrepreneurial potential. Using register data from the population of Denmark, we compare lifetime earnings of graduates who start their careers as entrepreneurs (“early entrepreneurs”), graduates who start as wage-employees but become entrepreneurs later in their careers (“late entrepreneurs”), and graduates who never become entrepreneurs (“never entrepreneurs”). Thanks to the richness of our data, we are able to track the careers and earnings of such graduates during their first 15 years in the labor market. Results from matched samples show an interesting picture. Consistent with recent research, a premium for individuals who ever become entrepreneurs is also present in our sample. Importantly, we find that early entrepreneurs are better-off than never entrepreneurs when they switch quickly to wage-employment after a brief experimentation period in entrepre-neurship, or when they are able to run long-lived successful firms. However, attempting entrepreneurship later in the career seems to be the best alternative in terms of risk-reward. Several mechanisms driving these results as well as their potential implications are further discussed.

M3 - Paper

ER -

Mérida AL, Rocha V. Entrepreneurial Beginning, Happy Ending? Entrepreneurship Upon Graduation and Lifetime Earnings. 2018. Paper presented at The Academy of Management Annual Meeting 2018, Chicago, United States.