Entrepreneurship and Job Creation

34 Pages Posted: 10 Mar 2015 Last revised: 1 Feb 2016

See all articles by Thomas B. Astebro

Thomas B. Astebro

HEC Paris - Economics and Decision Sciences

Joacim Tåg

Research Institute of Industrial Economics (IFN); Hanken School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 2015


Using a dataset with over 24 million observations and more than 230,000 entries into entrepreneurship we analyze the gross (including the founders), net (excluding the founders), and new (jobs to the former unemployed or those outside the labor force) job creation by entrepreneurs two and six years after start-up. We show that the average entrepreneur does not create any jobs for any other than him/her-self, and that the average entrepreneur typically arrives from having another job so that even for him/her-self there is no new job created but simply a reshuffling of jobs from older to new firms. We further show that incorporation status is by far the most important correlate of job creation. High-ability individuals are more likely to form incorporated ventures and individuals with low ability are more likely to start sole proprietorships.

Keywords: Entrepreneurship, incorporation, job creation, occupational choice, self-employment, stars and misfits

JEL Classification: L26, J24

Suggested Citation

Astebro, Thomas B. and Tåg, Joacim, Entrepreneurship and Job Creation (December 2015). IFN Working Paper No. 1059, Available at SSRN: https://ssrn.com/abstract=2576044

Thomas B. Astebro

HEC Paris - Economics and Decision Sciences ( email )

Jouy-en-Josas Cedex, 78351

HOME PAGE: http://www.hec.edu/Faculty-Research/Faculty-Directory/ASTEBRO-Thomas

Joacim Tåg (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15

Hanken School of Economics ( email )

PB 287
Helsinki, Vaasa 65101

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