Entrepreneurship, Experimentation, and Career Dynamics

Adrián L. Mérida, Vera Rocha

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

We contribute to the extant understanding of the relationship between entrepreneurial experience and lifetime earn-ings in two ways. First, we analyze the role of the timing of entrepreneurship within a professional career by explor-ing whether entrepreneurship 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. Using register data from the population of Denmark, we compare lifetime earnings of university 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 betteroff than never entrepreneurs when they switch quickly to wage-employment after a brief experimentation period in entrepreneurship, 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
EventDRUID18 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 11 Jun 201813 Jun 2018
Conference number: 40
https://conference.druid.dk/Druid/?confId=57

Conference

ConferenceDRUID18 Conference
Number40
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period11/06/201813/06/2018
Internet address

Keywords

  • Entrepreneurship
  • Graduates
  • Lifetime earnings
  • Experimentation

Cite this