Smart and illicit: who becomes an entrepreneur and does it pay?

Levine, Ross and Rubinstein, Yona ORCID: 0009-0000-6740-2803 (2013) Smart and illicit: who becomes an entrepreneur and does it pay? CEP Discussion Papers (CEPDP1237). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We disaggregate the self-employed into incorporated and unincorporated to distinguish between “entrepreneurs” and other business owners. The incorporated self-employed have a distinct combination of cognitive, noncognitive, and family traits. Besides coming from higher-income families with better-educated mothers, the incorporated - as teenagers - scored higher on learning aptitude tests, had greater self-esteem, and engaged in more aggressive, illicit, risk-taking activities. The combination of “smarts” and “aggressive/illicit/risk-taking” tendencies as a youth accounts for both entry into entrepreneurship and the comparative earnings of entrepreneurs. In contrast to a large literature, we also find that entrepreneurs earn much more per hour than their salaried counterparts.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2013 The Author(s)
Divisions:	Management
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
JEL classification:	L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Date Deposited:	22 Feb 2024 10:12
Last Modified:	11 Dec 2024 19:53
URI:	http://eprints.lse.ac.uk/id/eprint/121781

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