Are Entrepreneurs Penalized during Job Searches? It Depends on Who is Hiring

47 Pages Posted: 27 Jan 2020 Last revised: 5 Sep 2023

See all articles by Waverly W. Ding

Waverly W. Ding

University of Maryland - R.H. Smith School of Business

Hyeun Lee

R.H. Smith School of Business, University of Maryland

Debra L. Shapiro

University of Maryland - Robert H. Smith School of Business

Date Written: September 1, 2021

Abstract

How do job-applicants with entrepreneurship experience — “post-entrepreneurs”— fare in the wage labor job market? We propose an “entrepreneurship-experience penalty” generally occurs yet varies in strength depending on the recruiters faced by post-entrepreneurs in their job application process. In an experiment utilizing the selection-decisions of 275 recruiters (experimental study participants) in reaction to objectively-identical job-applicants’ resumes whose differences relate to whether their last-held job was as a Founder or as an Executive, we found that: (a) resumes of Founders (compared to Executives) are about 23-29 percent less likely to be picked as top-choice for hire, (b) this entrepreneurship penalty is weaker for recruiters with (rather than without) entrepreneurial aspirations, and (c) this recruiter moderator-effect is stronger for recruiters in smaller (rather than larger) firms.

Keywords: Entrepreneurship, job search, hiring, return-to-entrepreneurship, entrepreneurship-penalty, in-group favoritism, firm-size effect

JEL Classification: J60; M13

Suggested Citation

Ding, Waverly W. and Lee, Hyeun and Shapiro, Debra L., Are Entrepreneurs Penalized during Job Searches? It Depends on Who is Hiring (September 1, 2021). Available at SSRN: https://ssrn.com/abstract=3512270 or http://dx.doi.org/10.2139/ssrn.3512270

Waverly W. Ding (Contact Author)

University of Maryland - R.H. Smith School of Business ( email )

United States
301-405-1381 (Phone)

HOME PAGE: http://www.rhsmith.umd.edu/management/faculty/ding.aspx

Hyeun Lee

R.H. Smith School of Business, University of Maryland ( email )

College Park, MD
United States
3014052214 (Phone)
20740 (Fax)

Debra L. Shapiro

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States
(301) 405.9781 (Phone)

HOME PAGE: http://www.rhsmith.umd.edu/management/faculty/shapiro.html

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