We construct a simple model of occupational choice among agents with differing abilities. The fraction of agents creating new businesses who are low ability rises during recessions. Thus, cohorts born during recessions are on average lower quality: their businesses yield lower initial earnings,...

This paper presents an explicit model of the entrepreneur’s role in organizing the work undertaken by employees. The model assumes that agents vary in their ability to carry out this task, and so in one sense the model is a special case of Lucas’ [Bell Journal of Economics, 9, pp. 508-523,...

Human capital investment theory suggests that entrepreneurs should be generalists, while those who work for others should be specialists; it also predicts higher incomes for entrepreneurs with generalist skills. An alternative view predicts that those with greater taste for variety are more...