When less is more: Distinguishing between entrepreneurial choice and performance

A E Burke, Felix R FitzRoy, M A Nolan

    Research output: Contribution to journalArticlepeer-review

    85 Citations (Scopus)

    Abstract

    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.

    Original languageEnglish
    Pages (from-to)565-587
    Number of pages24
    JournalOxford Bulletin of Economics and Statistics
    Volume62
    Issue number5
    DOIs
    Publication statusPublished - Dec 2000

    Keywords

    • LIQUIDITY CONSTRAINTS
    • START-UP
    • ECONOMY

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