Entrepreneurship: Origins and returns

We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also em-ployment in partly self-owned limited liability firms. Based on this extended entrepre-neurship concept, we find that entrepreneurship tends to be profitable. It also raises in-come uncertainty, but the most successful quartile gains much more than the least suc-cessful quartile loses. Key determinants of the decision to become an entrepreneur are occupational qualifications, family resources, gender, and work environments. Individual unemployment encourages, while aggregate unemployment discourages entrepreneur-ship. JEL Classification: L26, M1