Ageing and Entrepreneurial Preferences

36 Pages Posted: 7 Jun 2015

See all articles by Teemu Kautonen

Teemu Kautonen

Aalto University School of Business; Anglia Ruskin University

Simon Down

Anglia Ruskin University

Maria Minniti

Syracuse University - Whitman School of Management

Date Written: 2014

Abstract

Previous research on age and entrepreneurship assumed homogeneity and downplayed age-related differences in the motives and aims underlying enterprising behaviour. We argue that the heterogeneity of entrepreneurship influences how the level of entrepreneurial activity varies with age. Using a sample of 2566 respondents from 27 European countries we show that entrepreneurial activity increases almost linearly with age for individuals who prefer to only employ themselves (self-employers), whereas it increases up to a critical threshold age (late 40s) and decreases thereafter for those who aspire to hire workers (owner-managers). Age has a considerably smaller effect on entrepreneurial behaviour for those who do not prefer self-employment but are pushed into it by lack of alternative employment opportunities (reluctant entrepreneurs). Our results question the conventional wisdom that entrepreneurial activity declines with age and suggest that effective responses to demographic changes require policy makers to pay close attention to the heterogeneity of entrepreneurial preferences.

Keywords: age, entrepreneurship, self-employment, preference, demographic change

JEL Classification: J14, J24, M13

Suggested Citation

Kautonen, Teemu and Down, Simon and Minniti, Maria, Ageing and Entrepreneurial Preferences (2014). Small Business Economics, Vol. 42, No. 3, 579-594, 2014. Available at SSRN: https://ssrn.com/abstract=2615291

Teemu Kautonen (Contact Author)

Aalto University School of Business ( email )

P.O. Box 21210
AALTO, FI-00076
Finland

Anglia Ruskin University ( email )

East Road
Cambridge CB1 1PT
United Kingdom

Simon Down

Anglia Ruskin University ( email )

East Road
Cambridge CB1 1PT
United Kingdom

Maria Minniti

Syracuse University - Whitman School of Management ( email )

721 University Avenue
Syracuse, NY 13244-2130
United States

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