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The employment consequences of founding an incorporated business among STEM founders: Evidence from Swedish microdata

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  • Sundriyal, Vivek Kumar
  • Gabrielsson, Jonas

Abstract

To what extent do STEM founders benefit from having founded an incorporated business upon returning to employment? Addressing this question would indicate the career value of engaging in entrepreneurship for STEM founders—but an answer remains elusive in the current literature. Drawing on human capital theory, we investigate the earnings consequences for STEM founders who return to employment post-founding a business and whether the earnings are contingent on their rank (managerial versus non-managerial) in the returning organization. Comparing founders to employees with similar characteristics in the STEM labor force in Sweden between 1990 and 2015, we find that founders, on average, earn marginally more (about 1.5%) on returning to employment. However, the earnings are likely to vary significantly depending on rank in the returning organization, as well as other factors such as founders’ age, previous earnings in wage employment, and the size of their employer on return. We discuss the implications for research and practice.

Suggested Citation

  • Sundriyal, Vivek Kumar & Gabrielsson, Jonas, 2024. "The employment consequences of founding an incorporated business among STEM founders: Evidence from Swedish microdata," Technovation, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:techno:v:133:y:2024:i:c:s0166497224000695
    DOI: 10.1016/j.technovation.2024.103019
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    More about this item

    Keywords

    STEM; Human capital; Organizational rank; Panel data; Returns to entrepreneurship;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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