Entrepreneurship as a Non-Profit-Seeking Activity
International Entrepreneurship and Management Journal, Forthcoming
Institute for Empirical Research in Economics Working Paper No. 243
42 Pages Posted: 1 Jun 2005
Abstract
It is typically assumed that people engage in entrepreneurship because there are profits to be made. In contrast to this view, this paper argues that entrepreneurship is more adequately characterized as a non-profit-seeking activity. Evidence from a broad range of authors and academic fields is discussed showing that entrepreneurship does quite generally not pay in monetary terms. Being an entrepreneur seems to be rather rewarding because it entails substantial non-monetary benefits, like greater autonomy, broader skill utilization, and the possibility to pursue one's own ideas. It is shown how incorporating these non-monetary benefits into economic models of entrepreneurship can lead to a better understanding of the phenomenon.
Keywords: entrepreneurship, self-employment, wage and return differentials, non-monetary work benefits, job satisfaction, over-optimism
JEL Classification: M13, J23, J31, J32, M54
Suggested Citation: Suggested Citation
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