An estimated equilibrium model of business formation and labor demand of entrepeneurs
| Authors |
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| Publication date |
1999
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| Series |
Tinbergen Institute Discussion Paper, TI 1999-073/4
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| Publisher |
Amsterdam / Rotterdam: Tinbergen Institute
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| Organisations |
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Faculty of Economics and Business (FEB)
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| Abstract |
This paper develops a theoretical model which explains businessformation and labor demand of entrepreneurs by thegiven distribution of risk attitude and entrepreneurial ability amongthe workforce. This results in an equilibrium modelwhich is converted into a structural econometric model of theindividual decision to start a business and if so how manypeople to employ. The model is estimated on a sample of Dutchindividuals. The empirical results confirm theimportance of both risk taking and ability.
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| Document type |
Working paper
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| Language |
English
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