Necessity and Opportunity Entrepreneurs through the Business Cycle
AbstractWe construct a simple model of occupational choice among agents with differing abilities. The fraction of agents creating new businesses who are low ability rises during recessions. Thus, cohorts born during recessions are on average lower quality: their businesses yield lower initial earnings, grow more slowly, and are more likely to fail. We show that, because of their effects on the ability distribution of business founders, short-lived recessions can have long-term consequences for the quality of a cohort of firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Florida International University, Department of Economics in its series Working Papers with number 1102.
Length: 27 pages
Date of creation: Apr 2011
Date of revision:
Entrepreneurship; self-employment; necessity; opportunity; recessions; firm-size distribution;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marco Caliendo & Alexander S. Kritikos, 2009.
""I Want to, But I also Need to": Start-Ups Resulting from Opportunity and Necessity,"
Discussion Papers of DIW Berlin
966, DIW Berlin, German Institute for Economic Research.
- Caliendo, Marco & Kritikos, Alexander S., 2009. ""I Want to, But I Also Need to": Start-Ups Resulting from Opportunity and Necessity," IZA Discussion Papers 4661, Institute for the Study of Labor (IZA).
- Thomas Astebro & Jing Chen & Peter Thompson, 2010.
"Stars and Misfits: Self-Employment and Labor Market Frictions,"
1003, Florida International University, Department of Economics.
- Thomas Åstebro & Jing Chen & Peter Thompson, 2011. "Stars and Misfits: Self-Employment and Labor Market Frictions," Management Science, INFORMS, vol. 57(11), pages 1999-2017, November.
- Miriam Bruhn, 2011.
"License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico,"
The Review of Economics and Statistics,
MIT Press, vol. 93(1), pages 382-386, February.
- Bruhn, Miriam, 2008. "License to sell : the effect of business registration reform on entrepreneurial activity in Mexico," Policy Research Working Paper Series 4538, The World Bank.
- Joern H. Block & Marcus Wagner, 2010.
"Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earning s Differentials,"
Schmalenbach Business Review (sbr),
LMU Munich School of Management, vol. 62(2), pages 154-174, April.
- Block, Joern & Wagner, Marcus, 2006. "Necessity and Opportunity Entrepreneurs in Germany: Characteristics and Earnings Differentials," MPRA Paper 610, University Library of Munich, Germany.
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November.
- Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-67, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sheng Guo).
If references are entirely missing, you can add them using this form.