Entrepreneurship Over the Life Cycle: Where are the Young Entrepreneurs?

65 Pages Posted: 30 Oct 2020

See all articles by Andrés Hincapié

Andrés Hincapié

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: May 2020

Abstract

Most individuals do not start a business and, if they do, they start well into their 30s. To explain these stylized facts, I estimate a dynamic Roy model with experience accumulation, risk aversion, and imperfect information about ability using the Panel Study of Income Dynamics. Information frictions and income risk reduce entrepreneurship by up to 40% and 35%, respectively. Entry costs and information frictions explain most of the delayed entry. Results from counterfactual policies targeting delayed entry suggest that entrepreneurship education can yield higher returns than subsidies. Fostering young entrepreneurship yields higher returns than fostering old entrepreneurship.

Suggested Citation

Hincapié, Andrés, Entrepreneurship Over the Life Cycle: Where are the Young Entrepreneurs? (May 2020). International Economic Review, Vol. 61, Issue 2, pp. 617-681, 2020, Available at SSRN: https://ssrn.com/abstract=3721372 or http://dx.doi.org/10.1111/iere.12436

Andrés Hincapié (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

102 Ridge Road
Chapel Hill, NC 27514
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
53
PlumX Metrics