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Moonlighting Entrepreneurs

Author

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  • Linus Wilson

    (University of Louisiana at Lafayette)

Abstract

When ability complements effort, we would expect effort to increase with variables that proxy for ability. For example, we show that the hours worked by entrepreneurs should increase in experience, a proxy for ability. Yet, even if education is positively correlated with entrepreneurial ability, it is shown that the relationship between education and hours worked is ambiguous. This is because education allows small business owners to work outside the venture (moonlight) at higher wages. These predictions are supported by existing empirical work.

Suggested Citation

  • Linus Wilson, 2009. "Moonlighting Entrepreneurs," Economics Bulletin, AccessEcon, vol. 29(3), pages 1896-1903.
    • Handle: RePEc:ebl:ecbull:eb-09-00452
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P38.pdf
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    References listed on IDEAS

    as
    1. Joachim Wagner, 2006. "Are nascent entrepreneurs 'Jacks-of-all-trades'? A test of Lazear's theory of entrepreneurship with German data," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2415-2419.
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    3. J. Wagner, 2003. "Testing Lazear's jack-of-all-trades view of entrepreneurship with German micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 687-689.
    4. Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
    5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    6. Marianne P. Bitler & Tobias J. Moskowitz & Annette Vissing‐Jørgensen, 2005. "Testing Agency Theory with Entrepreneur Effort and Wealth," Journal of Finance, American Finance Association, vol. 60(2), pages 539-576, April.
    7. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    8. Tobias J. Moskowitz & Annette Vissing-Jørgensen, 2002. "The Returns to Entrepreneurial Investment: A Private Equity Premium Puzzle?," American Economic Review, American Economic Association, vol. 92(4), pages 745-778, September.
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    Cited by:

    1. Kawakami, Atsushi, 2019. "Multiple job holding as a strategy for skills development," Japan and the World Economy, Elsevier, vol. 49(C), pages 73-83.

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    More about this item

    Keywords

    entrepreneurship; hours worked; moonlighting; opportunity cost; wages;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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