The Effect of Aging on Entrepreneurial Behavior

Posted: 9 Nov 2009

See all articles by Moren Levesque

Moren Levesque

University of Waterloo

Maria Minniti

Syracuse University - Whitman School of Management

Date Written: 2006

Abstract

The largest percentage of individuals seeking tocreate new firms are between the ages of 25 and 35. Consequently, therole that aging plays in entrepreneurial behavior is examined.UsingBecker's theory of time allocation, a model is created toidentify athreshold age at which an individual's willingness to invest time in startingnew firms declines. The model makes the assumption that individuals distribute their timebetween income-producing activities and leisure.There is a particular agefor each individual at which the allocation between the income-producingactivities and leisure provides maximum expected utility. The model demonstrates that risk aversion and wealth are key factors in anindividual's decision to pursue a new venture.As individuals grow older,the discount associated with each dollar of future income increases.Inturn, those activities that require a time commitment before an income isproduced are not viewed as being as attractive as wage labor, where the returnis immediate. The model presented can be adapted to consider other factors that may bepertinent to an individual's decision to become an entrepreneur.(SRD)

Keywords: Leisure, Startups, Individual traits, Age, Wealth, Career choices, Risk orientation, Motivation, Behavior (individual)

Suggested Citation

Levesque, Moren and Minniti, Maria, The Effect of Aging on Entrepreneurial Behavior (2006). Journal of Business Venturing, Vol. 21, Issue 2, p. 177-194 2006. Available at SSRN: https://ssrn.com/abstract=1501579

Moren Levesque (Contact Author)

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

Maria Minniti

Syracuse University - Whitman School of Management ( email )

721 University Avenue
Syracuse, NY 13244-2130
United States

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