Entrepreneurship: Origins and Returns

We examine the origins and outcome of entrepreneurship on the basis of exceptionallycomprehensive Norwegian matched worker-firm-owner data. In contrast to most existingstudies, our notion of entrepreneurship not only comprises self-employment, but alsoemployment in partly self-owned limited liability firms. Based on this extendedentrepreneurship concept, we find that entrepreneurship tends to be profitable. It also raisesincome uncertainty, but the most successful quartile gains much more than the leastsuccessful quartile loses. Key determinants of the decision to become an entrepreneur areoccupational qualifications, family resources, gender, and work environments. Individualunemployment encourages, while aggregate unemployment discourages entrepreneurship....