AbstractWhen ability complements effort, we would expect effort to increase with variables that proxy for ability. For example, we show that the hours worked by entrepreneurs should increase in experience, a proxy for ability. Yet, even if education is positively correlated with entrepreneurial ability, it is shown that the relationship between education and hours worked is ambiguous. This is because education allows small business owners to work outside the venture (moonlight) at higher wages. These predictions are supported by existing empirical work.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
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entrepreneurship; hours worked; moonlighting; opportunity cost; wages;
Find related papers by JEL classification:
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
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