NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Wealth, Tastes, and Entrepreneurial Choice

Erik G. Hurst, Benjamin W. Pugsley

Chapter in NBER book Measuring Entrepreneurial Businesses: Current Knowledge and Challenges (2017), John Haltiwanger, Erik Hurst, Javier Miranda, and Antoinette Schoar, editors (p. 111 - 151)
Conference held December 16-17, 2014
Published in September 2017 by University of Chicago Press
© 2017 by the National Bureau of Economic Research
in NBER Book Series Studies in Income and Wealth

The non-pecuniary benefi ts of managing a small business are a fi rst order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth eff ects independent of any fi nancing constraints, (2) non-pecuniary entrepreneurs select into small scale fi rms, (3) subsidies designed to stimulate more business entry can have regressive distributional eff ects. Despite abstracting from other important considerations such as risk, fi nancing constraints, and innovation, we show that non-pecuniary compensation is particularly relevant in discussions of small businesses.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w21644, Wealth, Tastes, and Entrepreneurial Choice, Erik G. Hurst, Benjamin W. Pugsley
Users who downloaded this chapter also downloaded* these:
Haltiwanger, Jarmin, and Miranda w16300 Who Creates Jobs? Small vs. Large vs. Young
Zarutskie and Yang How Did Young Firms Fare during the Great Recession? Evidence from the Kauffman Firm Survey
Bennett, Lawrence, and Sadun Are Founder CEOs Good Managers?
Haltiwanger, Jarmin, Kulick, and Miranda High Growth Young Firms: Contribution to Job, Output, and Productivity Growth
Guzman and Stern Nowcasting and Placecasting Entrepreneurial Quality and Performance
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us