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Personality characteristics and the decision to hire
[Do the unemployed become successful entrepreneurs?]

Author

Listed:
  • Marco Caliendo
  • Frank M Fossen
  • Alexander S Kritikos

Abstract

As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to understand whether the personality of entrepreneurs drives the first hiring in their firms. Using the German Socio-Economic Panel (SOEP), we analyze to what extent personality traits influence the probability of becoming an employer. The results indicate that personality matters. Risk tolerance unfolds the strongest influence on hiring, shortening the time until entrepreneurs hire their first employee; the effect size of a one-standard-deviation increase in risk tolerance is similar to that of having a university degree. Moreover, individuals who are more open to experience, more conscientious, and more trustful are more likely to hire upon establishing their business.

Suggested Citation

  • Marco Caliendo & Frank M Fossen & Alexander S Kritikos, 2022. "Personality characteristics and the decision to hire [Do the unemployed become successful entrepreneurs?]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(3), pages 736-761.
    • Handle: RePEc:oup:indcch:v:31:y:2022:i:3:p:736-761.
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    File URL: http://hdl.handle.net/10.1093/icc/dtab062
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    Cited by:

    1. Frank M. Fossen & Levent Neyse, 2024. "Entrepreneurship, Management, and Cognitive Reflection: A Preregistered Replication Study With Extensions," Entrepreneurship Theory and Practice, , vol. 48(4), pages 1082-1109, July.
    2. Cockx, Bart & Desiere, Sam, 2024. "Labour costs and the decision to hire the first employee," European Economic Review, Elsevier, vol. 170(C).
    3. Minssen, Luisa & Levels, Mark & Pfeifer, Harald & Wehner, Caroline, 2024. "Recruiting mid-qualified workers in product-innovating firms: Which personality traits matter?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 112(C).
    4. Marco Caliendo & Alexander S. Kritikos & Daniel Rodríguez & Claudia Stier, 2023. "Self-efficacy and entrepreneurial performance of start-ups," Small Business Economics, Springer, vol. 61(3), pages 1027-1051, October.
    5. Marco Caliendo & Alexander S. Kritikos & Claudia Stier, 2023. "The influence of start-up motivation on entrepreneurial performance," Small Business Economics, Springer, vol. 61(3), pages 869-889, October.
    6. Runst, Petrik & Thomä, Jörg, 2023. "Personality and self-employment: A journey into the craft's way of doing business," ifh Working Papers 38/2023, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh), revised 2023.
    7. Hossain, Md Mobarak & Fossen, Frank M. & Mukhopadhyay, Sankar, 2025. "An Estimated Model of Employer and Non-Employer Entrepreneurship," IZA Discussion Papers 18009, IZA Network @ LISER.
    8. Block, Joern & Kritikos, Alexander S. & Priem, Maximilian & Stiel, Caroline, 2022. "Emergency-aid for self-employed in the Covid-19 pandemic: A flash in the pan?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 93, pages 1-41.
    9. Frank M. Fossen & Trevor McLemore & Alina Sorgner, 2024. "Artificial Intelligence and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 20(8), pages 781-904, December.
    10. Astrid Kunze & Bram Timmermans, 2024. "Gender diversity in founding teams and hiring," GRAPE Working Papers 99, GRAPE Group for Research in Applied Economics.
    11. Vera Rocha & Luca Grilli, 2024. "Early-stage start-up hiring: the interplay between start-ups’ initial resources and innovation orientation," Small Business Economics, Springer, vol. 62(4), pages 1641-1668, April.
    12. Petrik Runst & Jörg Thomä, 2023. "Resilient entrepreneurs? — revisiting the relationship between the Big Five and self-employment," Small Business Economics, Springer, vol. 61(1), pages 417-443, June.

    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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