Age and Entrepreneurship: Nuances from Entrepreneur Types and Generation Effects

Abstract

The literature on the relationship between age and entrepreneurship has been inconclusive. This study for the first time examines this relationship by extending the occupational choice literature to eight entrepreneur types and four generational modification effects in the USA. Multilevel mixed-effect logistic regression models are estimated to examine the age effects in entrepreneur type propensities. Generational modification effects are compared for the same ages across neighboring generations by hierarchical age-period-cohort (HAPC) models. We find that entrepreneurial propensity rises with age until around 80. The propensity of novice (versus non-novice) and unincorporated (versus incorporated) entrepreneurs has a U-shaped age trend dipping around age 60, while the propensity of full-time (versus part-time) declines since age 30s. The propensity of incorporated (versus unincorporated) entrepreneurs declines from ages 44 to 51 for Gen-Xers, but not for Boomers; this propensity also declines faster for Boomers than for Traditionalists from ages 63 to 70.

Keywords: Novice entrepreneurs, Necessity entrepreneurs, Opportunity entrepreneurs, Full-time entrepreneurs, Part-time entrepreneurs, Incorporated entrepreneurs, Occupational choice

JEL Classification: J24, L26