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IIDS Lect 1_ Part 1: Ch2 & 6 (NOT 2.2) (Work/Job preferences based on…
IIDS Lect 1_ Part 1: Ch2 & 6 (NOT 2.2)
Entry
Approaches to entrepreneurship:
Economist
Organizational theorist
Measures of entrepreneurship
Entry: 1. approaches to entrepreneurship
Economist:
Individuals make choices that make them better off
Real cost of something is what you must give up
Organizational theorist:
What is needed to create an enterprise / How new enterprises are created
Economist approach: occupational view
Entrepreneurship
as occupation (outcome)
: individual choice between becoming entrepreneur or employee
Individuals only become entrepreneur if it makes them better off (revealed preference)
Occupational preference
Consider the following questions:
Would you prefer to work as an
entrepreneur or an employee?
Why?
Work/Job preferences based on perceived job differences
Individual work / job preferences may differ regarding
characteristics of entrepreneurship such as:
Independence and job control
Responsibility
Task and skill variety
Uncertainty (income)
Such preferences indicate something about whether entrepreneurship is an attractive option for someone
Usually not only / all about money
Better off as an entrepreneur?
Economists assume you only become entrepreneur when it makes you better off.
Two observations:
Individuals who are entrepreneur may be able to earn
more as wage employee (“earnings puzzle”)
Some entrepreneurs may prefer to work as employee (this may be true for individuals who are pushed into entrepreneurship or necessity entrepreneurs)