DP7360 Entrepreneurship: Origins and Returns

Author(s): Helge Berglann, Espen R Moen, Knut Roed, Jens Fredrik Skogstrøm
Publication Date: July 2009
Keyword(s): Entrepreneurship, Self-employment, Spin-offs
JEL(s): L26, M13
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7360

We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also employment in partly self-owned limited liability firms. Based on this extended entrepreneurship concept, we find that entrepreneurship tends to be profitable. It also raises in-come uncertainty, but the most successful quartile gains much more than the least successful quartile loses. Key determinants of the decision to become an entrepreneur are occupational qualifications, family resources, gender, and work environments. Individual unemployment encourages, while aggregate unemployment discourages entrepreneurship.