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Who works for startups? The relation between firm age, employee age, and growth

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  • Ouimet, Paige
  • Zarutskie, Rebecca

Abstract

Young firms disproportionately employ and hire young workers. On average, young employees in young firms earn higher wages than young employees in older firms. Young employees disproportionately join young firms with greater innovation potential and that exhibit higher growth, conditional on survival. We argue that the skills, risk tolerance, and joint dynamics of young workers contribute to their disproportionate share of employment in young firms. Moreover, an increase in the supply of young workers is positively related to new firm creation in high-tech industries, supporting a causal link between the supply of young workers and new firm creation.

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  • Ouimet, Paige & Zarutskie, Rebecca, 2014. "Who works for startups? The relation between firm age, employee age, and growth," Journal of Financial Economics, Elsevier, vol. 112(3), pages 386-407.
  • Handle: RePEc:eee:jfinec:v:112:y:2014:i:3:p:386-407 DOI: 10.1016/j.jfineco.2014.03.003
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    Cited by:

    1. Hubert Janicki & Henry Hyatt & Emin Dinlersoz, 2015. "Who Works for Whom? Worker Sorting in a Model of Entrepreneurship with Heterogeneous Labor Markets," 2015 Meeting Papers 104, Society for Economic Dynamics.
    2. Dorner, Matthias & Fryges, Helmut & Schopen, Kathrin, 2015. "Wages in high-tech start-ups - do academic spin-offs pay a wage premium?," IAB Discussion Paper 201517, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. repec:cen:wpaper:15-08 is not listed on IDEAS
    4. Chang, Xin & Fu, Kangkang & Low, Angie & Zhang, Wenrui, 2015. "Non-executive employee stock options and corporate innovation," Journal of Financial Economics, Elsevier, vol. 115(1), pages 168-188.
    5. Patrick Gaule, 2015. "Patents and the Success of Venture-Capital Backed Startups: Using Examiner Assignment to Estimate Causal Effects," CERGE-EI Working Papers wp546, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    6. Henry Sauermann, 2017. "Fire in the Belly? Employee Motives and Innovative Performance in Startups versus Established Firms," NBER Working Papers 23099, National Bureau of Economic Research, Inc.
    7. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2016. "Labour as a knowledge carrier: how increased mobility influences entrepreneurship," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1308-1326, December.
    8. Sara Moreira, 2017. "Firm Dynamics, Persistent Effects of Entry Conditions, and Business Cycles," Working Papers 17-29, Center for Economic Studies, U.S. Census Bureau.
    9. Brixy, Udo & Murmann, Martin, 2016. "The growth and human capital structure of new firms over the business cycle," IAB Discussion Paper 201642, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Pugsley, Benjamin & Sahin, Aysegul, 2014. "Grown-up business cycles," Staff Reports 707, Federal Reserve Bank of New York, revised 01 Sep 2015.
    11. E. Mark Curtis & Ryan Decker, 2018. "Entrepreneurship and State Taxation," Finance and Economics Discussion Series 2018-003, Board of Governors of the Federal Reserve System (U.S.).
    12. Trifkovic Neda, 2015. "Spillover Effects of International Standards: Work Conditions in Vietnamese Small and Medium Enterprises," WIDER Working Paper Series 047, World Institute for Development Economic Research (UNU-WIDER).
    13. Yang, Chia-Hsuan & Nugent, Rebecca & Fuchs, Erica R.H., 2016. "Gains from others’ losses: Technology trajectories and the global division of firms," Research Policy, Elsevier, vol. 45(3), pages 724-745.
    14. Tania Babina & Paige Ouimet & Rebecca Zarutskie, 2017. "Going Entrepreneurial? IPOs and New Firm Creation," Working Papers 17-18, Center for Economic Studies, U.S. Census Bureau.
    15. Jie (Jack) He & Tao Shu & Huan Yang, 2018. "The Employee Clientele of Corporate Leverage: Evidence from Personal Labor Income Diversification," Working Papers 18-01, Center for Economic Studies, U.S. Census Bureau.
    16. Xie, Qunyong, 2017. "Firm age, marketization, and entry mode choices of emerging economy firms: Evidence from listed firms in China," Journal of World Business, Elsevier, vol. 52(3), pages 372-385.

    More about this item

    Keywords

    Firm age; Employee age; Entrepreneurship; Wages; Venture capital;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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