Data on occupational choice among return migrants in Tunisia reveal that higher inequality of wealth reduces the level of new business activity. The effect is not large, however. Even dramatic redistributions of wealth would not provide much stimulus to entrepreneurship

It is widely assumed that pervasive credit market failures mean that a person's current wealth is critical to whether or not that person can take up opportunities to start a new business. The authors show that inequality in wealth can be either good or bad for the level of entrepreneurship in an...