Wealth, Industry And The Transition To Entrepreneurship

Although the debate about the effect of wealth on entrepreneurship is now almost two decades old, there is little consensus among researchers about the significance of wealth as a determinant for self-employment. This paper re-visits the relationship between wealth and entrepreneurship using data from the National Longitudinal Survey of Youth. Like Hurst and Lusardi (2004), the results suggest the relationship between wealth and the probability of entering entrepreneurship is nonlinear. However, unlike Hurst and Lusardi, the author finds the probability of entrepreneurship increases at an increasing rate with wealth, starting at lower quantiles of the wealth distribution.