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Are Nascent Entrepreneurs Jacks-of-All-Trades? A Test of Lazear's Theory of Entrepreneurship with German Data

Author

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  • Wagner, Joachim

    (Leuphana University Lüneburg)

Abstract

In a recent paper Edward Lazear proposed the jack-of-all-trades view of entrepreneurship. Based on a coherent model of the choice between self-employment and paid employment he shows that having a background in a large number of different roles increases the probability of becoming an entrepreneur. The intuition behind this proposition is that entrepreneurs must have sufficient knowledge in a variety of areas to put together the many ingredients needed for survival and success in a business, while for paid employees it suffices and pays to be a specialist in the field demanded by the job taken. This paper contributes to the entrepreneurship literature by empirically testing Lazear's hypothesis using a large recent representative sample of the German population. The empirical estimation takes the rare events nature of becoming a nascent entrepreneur and the regional stratification of the sample into account. The results illustrate the statistical significance and economic importance of the jack-of-all-trades theory.

Suggested Citation

  • Wagner, Joachim, 2003. "Are Nascent Entrepreneurs Jacks-of-All-Trades? A Test of Lazear's Theory of Entrepreneurship with German Data," IZA Discussion Papers 911, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp911
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    References listed on IDEAS

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    1. J. Wagner, 2003. "Testing Lazear's jack-of-all-trades view of entrepreneurship with German micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 687-689.
    2. King, Gary & Zeng, Langche, 2001. "Explaining Rare Events in International Relations," International Organization, Cambridge University Press, vol. 55(3), pages 693-715, July.
    3. Edward P. Lazear, 2005. "Entrepreneurship," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 649-680, October.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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