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Does career risk deter potential entrepreneurs?

TitleDoes career risk deter potential entrepreneurs?
Year of Publication2018
AuthorsGottlieb, J. D., Townsend R. R., and Xu T.
JournalNBER Working Paper
Abstract

Do potential entrepreneurs remain in wage employment because of concerns that they will face worse job opportunities should their entrepreneurial ventures fail? Using a Canadian reform that extended job-protected leave to one year for women giving birth after a cutoff date, we study whether the option to return to a previous job increases entrepreneurship. A regression discontinuity design reveals that longer job-protected leave increases entrepreneurship by 1.9 percentage points. These entrepreneurs start incorporated businesses that hire employees—in industries where experimentation before entry has low costs and high benefits. The effects are concentrated among those with more human and financial capital.

URLhttps://www.nber.org/papers/w22446
Document URLhttps://www.nber.org/papers/w22446.pdf
Publication Type
RDC
Surveys
Themes
Contract ID
Publication language(s)
English