The entrepreneurship premium

Boyan Jovanovic

doi:10.1007/s11187-019-00234-w

The entrepreneurship premium

Boyan Jovanovic

Research output: Contribution to journal › Article › peer-review

Abstract

Recent evidence suggests that entrepreneurship does not pay enough to compensate people for the risk that it entails. It sometimes even shows an entrepreneurship discount. This paper shows that such a discount can arise if entrepreneurial skills and working skills are negatively correlated in the population of agents. The paper also shows that in an otherwise standard occupational choice setting, the entrepreneurship premium rises with entrepreneurial scarcity and falls with their span of control. Finally, liquidity constraints on startups raise the entrepreneurship premium by lowering the equilibrium wage.

Original language	English (US)
Pages (from-to)	555-568
Number of pages	14
Journal	Small Business Economics
Volume	53
Issue number	3
DOIs	https://doi.org/10.1007/s11187-019-00234-w
State	Published - Oct 1 2019

Keywords

Entrepreneurship
Profit
Wage

ASJC Scopus subject areas

General Business, Management and Accounting
Economics and Econometrics

Access to Document

10.1007/s11187-019-00234-w

Cite this

@article{e5503829d97f45f0b01363f2e5e1e9c8,

title = "The entrepreneurship premium",

abstract = "Recent evidence suggests that entrepreneurship does not pay enough to compensate people for the risk that it entails. It sometimes even shows an entrepreneurship discount. This paper shows that such a discount can arise if entrepreneurial skills and working skills are negatively correlated in the population of agents. The paper also shows that in an otherwise standard occupational choice setting, the entrepreneurship premium rises with entrepreneurial scarcity and falls with their span of control. Finally, liquidity constraints on startups raise the entrepreneurship premium by lowering the equilibrium wage.",

keywords = "Entrepreneurship, Profit, Wage",

author = "Boyan Jovanovic",

note = "Publisher Copyright: {\textcopyright} 2019, The Author(s).",

year = "2019",

month = oct,

day = "1",

doi = "10.1007/s11187-019-00234-w",

language = "English (US)",

volume = "53",

pages = "555--568",

journal = "Small Business Economics",

issn = "0921-898X",

publisher = "Springer Netherlands",

number = "3",

}

TY - JOUR

T1 - The entrepreneurship premium

AU - Jovanovic, Boyan

PY - 2019/10/1

Y1 - 2019/10/1

N2 - Recent evidence suggests that entrepreneurship does not pay enough to compensate people for the risk that it entails. It sometimes even shows an entrepreneurship discount. This paper shows that such a discount can arise if entrepreneurial skills and working skills are negatively correlated in the population of agents. The paper also shows that in an otherwise standard occupational choice setting, the entrepreneurship premium rises with entrepreneurial scarcity and falls with their span of control. Finally, liquidity constraints on startups raise the entrepreneurship premium by lowering the equilibrium wage.

AB - Recent evidence suggests that entrepreneurship does not pay enough to compensate people for the risk that it entails. It sometimes even shows an entrepreneurship discount. This paper shows that such a discount can arise if entrepreneurial skills and working skills are negatively correlated in the population of agents. The paper also shows that in an otherwise standard occupational choice setting, the entrepreneurship premium rises with entrepreneurial scarcity and falls with their span of control. Finally, liquidity constraints on startups raise the entrepreneurship premium by lowering the equilibrium wage.

KW - Entrepreneurship

KW - Profit

KW - Wage

UR - http://www.scopus.com/inward/record.url?scp=85070975675&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85070975675&partnerID=8YFLogxK

U2 - 10.1007/s11187-019-00234-w

DO - 10.1007/s11187-019-00234-w

M3 - Article

AN - SCOPUS:85070975675

SN - 0921-898X

VL - 53

SP - 555

EP - 568

JO - Small Business Economics

JF - Small Business Economics

IS - 3

ER -

The entrepreneurship premium

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this