When Less is More: Distinguishing Between Entrepreneurial Choice and Performance

• Autores: Andrew E. Burke, Felix FitzRoy, Richard A. Nolan
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 62, Nº. 5, 2000, págs. 565-587
• Idioma: inglés
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• Resumen

  • This paper uses NCDS data on individual characteristics to distinguish determinants of entrepreneurial choice, income and job generation. A new model of utility from self‐employment shows that relaxing liquidity constraints could inhibit performance. Empirically, we find that a range of inheritance enhances the performance of the self‐employed and increases self‐employment; while higher education also increases self‐employment income and job creation, but reduces the probability of self‐employment. Combining these choice and performance effects, we find that education has a positive net effect on job creation, as does inheritance up to a certain threshold.