Veranstaltung
17
Jun 2019

14:15 - 15:45
IWH Research Seminar

Self-Employment Dynamics and the Returns to Entrepreneurship

If workers are initially uncertain about their entrepreneurial abilities, then the lifetime value of trying self-employment, with the option to return to paid work, exceeds the expected static value of working for oneself in a single year.

Wer
Eleanor W. Dillon , Amherst College
Wo
conference room
Eleanor W. Dillon

Zur Person

Eleanor W. Dillon is currently a Visiting Assistant Professor at Amherst College. Before that she was an Assistant Professor at Arizona State University. Her research focuses on job choice, entrepreneurship, and the economics of education.

If workers are initially uncertain about their entrepreneurial abilities, then the lifetime value of trying self-employment, with the option to return to paid work, exceeds the expected static value of working for oneself in a single year. After documenting that moves from self-employment to paid work are common among men in the PSID, we estimate the expected returns to entrepreneurship within a dynamic lifecycle model that allows for non-random selection and gradual learning about entrepreneurial earnings. The option to abandon self-employment and return to paid work increases the lifetime value of entrepreneurship relative to earnings in the cross section. We use the model to evaluate policies that change incentives for experimentation with self-employment.

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