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The Opposing Effects of Wealth on Younger and Older Entrepreneurs

Author

Listed:
  • Philippe d’Astous

  • Vyacheslav Mikhed
  • Sahil Raina
  • Barry Scholnick

Abstract

Using wealth windfalls from lottery winnings and matched employer-employee tax files, we compare the effect of additional wealth on the entrepreneurial activity of older and younger individuals. We find that additional wealth leads older winners (aged 55 to 64) to reduce business ownership and growth (as measured by sales, revenue, and employees). In contrast, extra wealth increases younger winners’ (aged 21 to 54) business ownership, but it has no effect on their business growth. The increase in business activity of a young winner does not offset the negative growth for an older winner, which may hurt economic growth.

Suggested Citation

  • Philippe d’Astous & Vyacheslav Mikhed & Sahil Raina & Barry Scholnick, 2025. "The Opposing Effects of Wealth on Younger and Older Entrepreneurs," Working Papers 25-32, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:101992
    DOI: 10.21799/frbp.wp.2025.32
    Note: Supersedes Working Paper 25-03 – How Wealth and Age Interact to Affect Entrepreneurship
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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