Personality Characteristics and the Decision to Become and Stay Self-Employed

65 Pages Posted: 27 Mar 2011

See all articles by Marco Caliendo

Marco Caliendo

University of Potsdam; Institute for the Study of Labor (IZA)

Frank M. Fossen

University of Nevada, Reno; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Alexander Kritikos

Europa-Universitaet Viadrina - Fakultat fur Wirtschaftswissenschaften; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: March 2011

Abstract

This paper systematically investigates whether different kinds of personality characteristics influence entrepreneurial development. On the basis of a large, representative household panel survey, we examine the extent to which the Big Five traits and further personality characteristics, which are more specifically related to entrepreneurial tasks, influence entry into self-employment and survival of self-employed persons in Germany. The empirical analysis reveals that among the specific characteristics in particular "risk attitudes" and "locus of control" have strong effects on entry and survival. With respect to the Big Five approach, in particular the traits "openness to experience" and "extraversion" and to a lower extent "agreeableness" and "neuroticism" help to explain entrepreneurial development. The explanatory power of the Big Five is comparable to one of the most prominent determinants of entrepreneurship - education - and approximately three times larger than parental self-employment.

Keywords: Entrepreneurship, Personality, Big Five, Risk Aversion, Locus of Control

JEL Classification: D81, J23, M13

Suggested Citation

Caliendo, Marco and Fossen, Frank M. and Kritikos, Alexander S., Personality Characteristics and the Decision to Become and Stay Self-Employed (March 2011). DIW Berlin Discussion Paper No. 1113. Available at SSRN: https://ssrn.com/abstract=1793171 or http://dx.doi.org/10.2139/ssrn.1793171

Marco Caliendo

University of Potsdam ( email )

August-Bebel Strasse 89
Potsdam, 14482
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+49(0)331/9773225 (Phone)
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HOME PAGE: http://www.uni-potsdam.de/en/empwifo/news.html

Institute for the Study of Labor (IZA) ( email )

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Frank M. Fossen (Contact Author)

University of Nevada, Reno ( email )

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Reno, NV 89557
United States

German Institute for Economic Research (DIW Berlin)

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Germany

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IZA Institute of Labor Economics

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Germany

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Alexander S. Kritikos

Europa-Universitaet Viadrina - Fakultat fur Wirtschaftswissenschaften ( email )

15230 Frankfurt (Oder)
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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