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How Wealth and Age Interact to Affect Entrepreneurship

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 and older) to reduce business ownership and scale. In contrast, additional wealth leads younger winners to increase business ownership and performance. We also show that extra lottery wealth reduces the wage labor supply of both younger and older individuals. Thus, while younger lottery winners reduce wage labor to increase entrepreneurship, older lottery winners reduce both wage labor and entrepreneurship to retire.

Suggested Citation

  • Philippe d'Astous & Vyacheslav Mikhed & Sahil Raina & Barry Scholnick, 2025. "How Wealth and Age Interact to Affect Entrepreneurship," Cahiers de recherche / Working Papers 17, Institut sur la retraite et l'épargne / Retirement and Savings Institute.
    • Handle: RePEc:rsi:irersi:17
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    References listed on IDEAS

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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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