Early Career Choices of Superstar Entrepreneurs
67 Pages Posted: 13 Mar 2018 Last revised: 10 Apr 2019
Date Written: April 4, 2019
Using a dataset on career paths of elite U.S. engineers, including superstar entrepreneurs, we examine the effect of early career choices on long-run entrepreneurial outcomes. Exploiting exogenous variation in entry labor market conditions, driven by local financial sector growth, and comparing classmates in the same school-major-year, we find that talented engineers are more likely to switch from engineering jobs to finance in high finance growth areas. Compared to classmates who remain in engineering, these individuals create fewer startups that are large employers, receive VC funding, are acquired, and issue patents. A quasi-experimental design using state-wise banking deregulation produces similar results.
Keywords: Finance and labor; Talent allocation; Superstars; Human capital; Careers in finance; Financial sector growth; Entrepreneurship; Innovation
JEL Classification: G2, G20, J2, J3, J31, M52, N2
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