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Entrepreneurship as a non-profit-seeking activity

  • Matthias Benz
Article

Abstract

It is typically assumed that people engage in entrepreneurship because there are profits to be made. In contrast to this view, this paper argues that entrepreneurship is more adequately characterized as a non-profit-seeking activity. Evidence from a broad range of authors and academic fields is discussed showing that entrepreneurship does quite generally not pay in monetary terms. Being an entrepreneur seems to be rather rewarding because it entails substantial non-monetary benefits, like greater autonomy, broader skill utilization, and the possibility to pursue one’s own ideas. It is shown how incorporating these non-monetary benefits into economic models of entrepreneurship can lead to a better understanding of the phenomenon.

Keywords

Entrepreneurship Self-employment Wage and return differentials Non-monetary work benefits Job satisfaction 

JEL Classification

M13 J23 J31 J32 M54 

Notes

Acknowledgement

I would like to thank Thomas Astebro, William Baumol, Gary Becker, Raquel Bernal, Patrick Bolton, Robert D. Cooter, Bruno S. Frey, Gerald Hosp, Paul DiMaggio, Henry Hansmann, Amir Licht, Raymond Miles, Ebba Norsted, Alois Stutzer, Tom Tyler, Burton Weisbrod, Oliver Williamson, several anonymous referees and seminar participants at UC Berkeley, Northwestern University, Harvard Business School and the University of Zurich for helpful comments and discussions. The paper was written while I was a visiting research fellow at the Boalt School of Law, University of California at Berkeley, whose hospitality I gratefully acknowledge, as well as financial support by the Swiss National Science Foundation.

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Copyright information

© Springer Science + Business Media, LLC 2006

Authors and Affiliations

  1. 1.Institute for Empirical Research in EconomicsUniversity of ZurichZurichSwitzerland

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