Research

Draft available upon request

Does entrepreneurship generate upward wealth mobility, and for whom does it matter the most? Using Norwegian administrative data on 26,970 entrepreneurs, I find that entrepreneurs advance 6.4 percentile points beyond their parents within 5 years of entry. Roughly half of this gap is already present at entry, and the rest is accumulated afterward. These gains, however, vary sharply by background. Post-entry gains are the largest in the middle of the parental wealth distribution. Poorer entrepreneurs show larger pre-entry advantages than post-entry gains, and the wealthiest gain little in relative terms but are the most likely to remain at the top. Education matters in two ways: entrepreneurs with less formal schooling see the largest relative gains, while those with technical degrees are the most likely to reach the top decile. Business graduates see the weakest outcomes. Wealth mobility is notably lower than suggested by income-based measures.

Presented at: AFA PhD Poster Session 2024, Nordic Finance Network PhD Seminar 2023

I study individuals who become entrepreneurs following an industry downturn using the massive decline in oil prices in 2014. I find that the oil price decline resulted in increased entrepreneurial activity among oil workers in Norway. Compared to entrepreneurs without an oil industry background who started new firms in the years 2015 and 2016, I find that such `entrepreneurs of circumstance' run more profitable firms. They also tend to originate from lower income levels within their respective companies compared to entrepreneurs who started firms prior to the oil price drop. Notably, the difference in profitability between entrepreneurs with and without previous oil experience is unique to the cohort of firms founded after the oil price drop.