Entrepreneurship: Origins and Returns
Abstract
We examine the origins and outcome of entrepreneurship on the basis of exceptionally
comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing
studies, our notion of entrepreneurship not only comprises self-employment, but also employment
in partly self-owned limited liability firms. Based on this extended entrepreneurship
concept, we find that entrepreneurship tends to be profitable. It also raises income
uncertainty, but the most successful quartile gains much more than the least successful
quartile loses. Key determinants of the decision to become an entrepreneur are
occupational qualifications, family resources, gender, and work environments. Individual
unemployment encourages, while aggregate unemployment discourages entrepreneurship.