Are nascent entrepreneurs Jacks-of-all-trades’? A test of Lazear's theory of entrepreneurship with German data
In a recent paper Edward Lazear proposed the Jack-of-all-trades’ view of entrepreneurship. Based on a coherent model of the choice between self-employment and paid employment he shows that having a background in a large number of different roles increases the probability of becoming an entrepreneur. The intuition behind this proposition is that entrepreneurs must have sufficient knowledge in a variety of areas to put together the many ingredients needed for survival and success in a business, while for paid employees it suffices and pays to be a specialist in the field demanded by the job taken. This study contributes to the entrepreneurship literature by empirically testing Lazear's hypothesis using a large recent representative sample of the German population. The empirical estimation takes the rare events nature of becoming a nascent entrepreneur and the regional stratification of the sample into account. The results illustrate the statistical significance and economic importance of the jack-of-all-trades’ theory.
Document Type: Research Article
Affiliations: University of Lueneburg, Institute of Economics, D-21332 Lueneburg, Germany
Publication date: November 10, 2006