Entrepreneurial career paths: occupational context and the propensity to become self-employed
- 625 Downloads
We investigate the relationship between characteristics of an occupation-specific environment and the decision of employees to start an own business. A relatively high occupation-specific unemployment risk and high earnings risk are conducive to opt for self-employment. Also, occupations that are characterized by high self-employment rates foster entrepreneurial choice among their employees. The results suggest that career choices of future entrepreneurs are driven by different motivations than those of non-entrepreneurs. In particular, the expectation of a pronounced financial gain is critical for future entrepreneurs when they make their initial occupational choices in paid employment and it is also relevant for a self-employment choice. We find that when future entrepreneurs enter the labor market, they are more likely to choose occupations that require a relatively high variety of skills.
KeywordsEntrepreneurial choice Occupation-specific determinants of entrepreneurship Employment risk Earnings risk Skill variety
JEL classificationL26 J24 D01
- Burton, M. D., Sørensen, J. B., & Dobrev, S. D. (2016). A careers perspective on entrepreneurship. Entrepreneurship: Theory and Practice. doi: 10.1111/etap.12230.
- Costa, P. T., & McCrae, R. R. (1992). Revised NEO personality inventory (NEO-PI-R) and NEO five factor inventory (NEO-FFI) professional manual. Odessa: PAR.Google Scholar
- Fritsch, M., Bublitz, E., & Rusakova, A. (2012a). Berufstätigkeit und Entrepreneurial Choice–Welchen Einfluss hat die Berufstätigkeit auf die Entscheidung zur unternehmerischen Selbständigkeit? In: C. Köhler & A. Krause (Eds.), Arbeit als Ware? Zur Theorie flexibler Arbeitsmärkte. Bielefeld: transcript.Google Scholar
- Fritsch, M., Kritikos, A., & Rusakova, A. (2012b). Who starts a business and who is self-employed in Germany? IZA discussion paper no. 6326. doi: 10.2139/ssrn.2006494.
- Haisken-DeNew, J. P., & Frick, J. R. (2005). Desktop companion to the German socio-economic panel (SOEP). Berlin: DIW Berlin.Google Scholar
- Hamilton, B. H., Papageorge, N. W., & Pande, N. (2015). The right stuff? Personality and entrepreneurship. Working paper, Johns Hopkins University. doi: 10.2139/ssrn.2438944.
- Koellinger, Philipp, Maria Minniti, and Christian Schade (2007): “I think I Can, I Think I Can”: Overconfidence and Entrepreneurial Behavior. Journal of Economic Psychology, 28, 502–527.Google Scholar
- Mincer, J. (1974). Schooling, experience, and earnings. New York: Columbia University Press.Google Scholar
- Nedelkoska, Ljubica and Frank Neffke (2010): Human capital mismatches along the career path, Jena economic research papers no. 051–2010, Friedrich Schiller University and Max Planck Institute of Economics Jena.Google Scholar
- Obschonka, M., & Stuetzer, M. (2017). Integrating psychological approaches to entrepreneurship: the entrepreneurial personality system (EPS). Small Business Economics. doi: 10.1007/s11187-016-9821-y.
- Pfeifer, C. (2010). Risk aversion and sorting into public sector employment. German Economic Review, 12, 85–99.Google Scholar
- Poschke, M. (2012). Who becomes an entrepreneur? Labor market prospects and occupational choice. Journal of Economic Dynamics & Control. doi: 10.1016/j.jedc.2012.11.003.
- Shane, S. (2000) ‘Prior knowledge and the discovery of entrepreneurial opportunities’, Organization Science, 11(4), 448–469.Google Scholar
- Shane, S. (2008). The Illusions of Entrepreneurship: the Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By. Yale University Press, New Haven.Google Scholar
- Sorgner, A., Fritsch, M., & Kritikos, A. (2017). Do entrepreneurs really earn less? Small Business Economics, 49, 251–272. doi: 10.1007/s11187-017-9874-6.
- Tristao, I. M. (2007). Occupational employment risk and its consequences for unemployment duration and wages. Congressional Budget Office, Washington D.C, Working paper 2007–01.Google Scholar
- Wagner, G. G., Frick, J. R., & Schupp, J. (2007). The German socio-economic panel study (SOEP)―scope, evolution and enhancements. Journal of Applied Social Science Studies, 127, 139–169.Google Scholar