Experience and entrepreneurship: a career transition perspective

Rider, C I, Thompson, P, Kacperczyk, O and Tag, J (2019) Experience and entrepreneurship: a career transition perspective. Industrial and Labor Relations Review, 72 (5). pp. 1149-1181. ISSN 0019-7939 OPEN ACCESS


We cast entrepreneurship as one of three career choices – remaining with one’s employer, changing employers, or engaging in entrepreneurship – and theorize how the likelihood of entrepreneurship evolves over one’s career. We empirically demonstrate an inverted U-shaped relationship between accumulated experience and entrepreneurship across various industries and jobs. Despite detailed career history data and job displacement shocks that eliminate the current employer choice, we highlight the difficulty of inferring the mechanism underlying the observed relationship. These analyses motivate a formal career transitions model in which employer-specific and general skills accumulate with experience but potential employers observe only total skill. The upshot of our model is that entrepreneurial career transitions vary with two relative costs: (1) to an individual of forming a business and (2) to a potential employer of utilizing the individual’s employer-specific skills. We discuss how this model contributes new insights into entrepreneurial careers.

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Item Type: Article
Subject Areas: Strategy and Entrepreneurship
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Rider, C. I., Thompson, P., Kacperczyk, O., & Tåg, J. (2019). Experience and Entrepreneurship: A Career Transition Perspective. Industrial and Labor Relations Review (ILR), 72(5), 1149–1181. https://doi.org/10.1177/0019793919852919
Copyright © 2019 Cornell University. Reprinted by permission of SAGE Publications.

Date Deposited: 22 Mar 2019 11:31
Date of first compliant deposit: 12 Mar 2019
Subjects: Entrepreneurs
Last Modified: 17 Jul 2024 01:26
URI: https://lbsresearch.london.edu/id/eprint/1109

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