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When Less is More: Distinguishing Between Entrepreneurial Choice and Performance
Author(s) -
Burke Andrew E.,
FitzRoy Felix R.,
Nolan Michael A.
Publication year - 2000
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.00190
Subject(s) - inheritance (genetic algorithm) , self employment , economics , market liquidity , econometrics , demographic economics , labour economics , microeconomics , entrepreneurship , monetary economics , biochemistry , chemistry , finance , gene
This paper uses NCDS data on individual characteristics to distinguish determinants of entrepreneurial choice, income and job generation. A new model of utility from self‐employment shows that relaxing liquidity constraints could inhibit performance. Empirically, we find that a range of inheritance enhances the performance of the self‐employed and increases self‐employment; while higher education also increases self‐employment income and job creation, but reduces the probability of self‐employment. Combining these choice and performance effects, we find that education has a positive net effect on job creation, as does inheritance up to a certain threshold.