Impacts of Entrepreneurial Experience on Life Time Earnings and Career Prospects (EELiTE)

Abstract:

Adrián Mérida’s thesis “Impacts of Entrepreneurial Experience on Life Time Earnings and Careers Prospects” explores the impact of entrepreneurial experience on different aspects of an individual professional success. Some of the main research questions are the following:· What are the consequences of choosing entrepreneurship instead of paid-employment at the time of starting a professional career?· Does prior entrepreneurial experience help to explain the pay and performance of CEOs?The thesis contributes to the extant literature in several ways. Entrepreneurship is usually promoted among young individuals. However, the consequences that an early entrepreneurial venture would have on their future remain unexplored. There is evidence that entrepreneurs earn less than paid-employees and that a spell in entrepreneurship is rewarded differently by potential employers than a history of continued paid-employment experience. These circumstances may cause long term effects on their careers, as initial conditions at the time of entry into the labor market can have persistent consequences.On the other hand, Mérida’s thesis connects the topic of the returns to entrepreneurial experience to the literature on CEO’s pay and performance. Entrepreneurs are seen as Jacks of all trades; in the sense of Lazear. At the same time, there is evidence that CEOs with general managerial skills enjoy a higher pay. Mérida therefore hypothesizes that individuals with entrepreneurial experience should be more highly rewarded as CEOs than their counterparts who only had paid-employment experience.