Dear Colleagues,
Our next virtual seminar in the Entrepreneurship and Innovation Policy Research series Thursday, February 27, from 11:00-12:00 ET. Geoffrey Borchhardt (U Oregon) - will present "Good jobs, bad jobs, and the long-term earnings consequences of self-employment". Abstract is below. Click the link HERE to register for the 2/27 seminar.
We hope you join us!
- Tim Folta (UCONN), Maryann Feldman (ASU), and Supradeep Dutta (Rutgers U)
Abstract: Most entrepreneurs fail, raising the question of how they fare upon returning to the labor market. While prior work points to an earnings penalty, it assumes a specific type of entrepreneur: someone who would have engaged in stable, traditional employment had they not entered self-employment. Instead, rising levels of precarious and non-standard work imply that many face different employment arrangements and evaluation criteria. Do entrepreneurs in precarious labor markets get rewarded for their experience? Or do employers view them to have engaged in just another form of casual employment? Using novel, high-frequency survey data from India, I adjudicate between competing predictions. First, replicating prior work, I find evidence of an earnings penalty for former founders in traditional, salaried labor markets. In precarious labor markets, however, the earnings trajectories of former entrepreneurs look similar to control cases on average. But this hides important nuance: Entrepreneurs who remained self-employed for only a short amount of time experience a small, but persistent, penalty, akin to switching occupations. In contrast, more successful entrepreneurs reap a large earnings premium. For them, entrepreneurship appears to act as a signal of ability to future employers. Repeat entrepreneurs also report increased earnings