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Author: Evans, David S.
Resulting in 3 citations.
1. Evans, David S.
Jovanovic, Boyan
An Estimated Model of Entrepreneurial Choice under Liquidity Constraints
Journal of Political Economy 97,4 (August 1989): 808-827.
Also: http://www.jstor.org/stable/1832192
Cohort(s): Young Men
Publisher: University of Chicago Press
Keyword(s): Assets; Behavior; Income; Self-Employed Workers

This paper develops and estimates a behavioral model of entrepreneurial choice under liquidity constraints. Using data from the NLS of Young Men, it was found that liquidity constraints bind and prospective entrepreneurs must bear most of the risk inherent in their venture. Whether people are more inclined to become entrepreneurs. Capital is essential for starting a business and liquidity constraints tend to exclude those with insufficient funds.
Bibliography Citation
Evans, David S. and Boyan Jovanovic. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints." Journal of Political Economy 97,4 (August 1989): 808-827.
2. Evans, David S.
Leighton, Linda S.
Some Empirical Aspects of Entrepreneurship
American Economic Review 79,3 (June 1989): 519-535.
Also: http://www.jstor.org/stable/1806861
Cohort(s): Young Men
Publisher: American Economic Association
Keyword(s): Assets; Census of Population; Educational Returns; Internal-External Attitude; Life Cycle Research; Locus of Control (see Rotter Scale); Mobility, Job; Rotter Scale (see Locus of Control); Self-Employed Workers; Work Histories

Permission to reprint the abstract has not been received from the publisher.

Using data on full-time self-employed workers from the NLS of Young Men, coupled with CPS data, this report examines self-employment entry and exit over the life cycle and focuses on the relative returns to business and wage experience and education of self-employment vs wage work. Key findings include: (1) The probability of switching into self-employment is roughly independent of age and total labor-market experience. This result is not consistent with standard job-shopping models such as William Johnson (1978) and Robert Miller (1984) which predict that younger workers will try riskier occupations first. (2) The probability of departing from self-employment decreases with duration of self-employment, falling from about 10 percent in the early years to 0 by the eleventh year in self-employment. About half of the entrants return to wage work within seven years. (3) The fraction of the labor force that is self-employed increases with age until the early 40s and then remains constant within the retirement years. (4) Men with greater assets are more likely to switch into self-employment all else equal. (5) Wage experience has a much smaller return in self-employment than in wage work while business experience has just about the same return in wage work as in self-employment. (6) Poorer wage workers - that is, unemployed workers, lower-paid wage workers, and men who have changed jobs a lot - are more likely to enter self-employment or to be self-employed at a point in time, all else equal. (7) As predicted by one of the leading psychological theories, men who believe their performance depends largely on their own actions - that is, have an internal locus of control as measured by a test known as the Rotter Scale - have a greater propensity to start businesses.
Bibliography Citation
Evans, David S. and Linda S. Leighton. "Some Empirical Aspects of Entrepreneurship." American Economic Review 79,3 (June 1989): 519-535.
3. Evans, David S.
Leighton, Linda S.
Why Do Smaller Firms Pay Less?
Journal of Human Resources 24,2 (Spring 1989): 299-318.
Also: http://www.jstor.org/stable/145858
Cohort(s): Young Men
Publisher: University of Wisconsin Press
Keyword(s): Current Population Survey (CPS) / CPS-Fertility Supplement; Education; Firm Size; Firms; Heterogeneity; Job Tenure; Job Turnover; Wages

This paper uses data from the NLS of Young Men and the Current Population Survey for 1983 to examine the relationships among wages, firm size, and plant size. Results indicate that: (1) plant size has little independent effect on wages once the firm size of firms with fewer than 1,000 employees is controlled for; (2) evidence of sorting on observed and unobserved ability characteristics across firm sizes was found. Better educated and more stable workers are in larger firms; and (3) results from a first-difference estimator indicate that about 60 percent of the wage-size effect is due to unobserved heterogeneity when all firms are considered and about 100 percent when firms with 25 or more employees are considered.
Bibliography Citation
Evans, David S. and Linda S. Leighton. "Why Do Smaller Firms Pay Less?" Journal of Human Resources 24,2 (Spring 1989): 299-318.