IS THERE A LABOR MARKET ‘PENALTY’ TO ENTREPRENEURSHIP? THE EVOLUTION OF EARNINGS FOR BUSINESS-OWNERS WHO BECOME PAID EMPLOYEES (INTERACTIVE PAPER)

Abstract

We compare the labor market value (wage-wise) of human capital acquired while experiencing entrepreneurship with that of human capital acquired while experiencing wage work. While, overall, former entrepreneurs capture a wage premium through better career prospects, they are paid less than other employees assigned to the same hierarchical level.