Does working at a start‑up pay off?

  • Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
Author:Daniel Fackler, Lisa Hölscher, Claus Schnabel, Antje Weyh
Parent Title (English):Small business economics
Publisher:Springer Science + Business Media B.V.
Place of publication:Dordrecht [u.a.]
Document Type:Article
Date of Publication (online):2021/09/08
Date of first Publication:2021/09/08
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2022/02/14
Tag:Germany; Linked employer-employee data; Start-ups; Wages; Young firms
Page Number:23
Early View: Online Version before inclusion in an issue
Open Access funding enabled and organized by Projekt DEAL.
Institutes:Angeschlossene und kooperierende Institutionen / Europäische Akademie der Arbeit in der Universität Frankfurt am Main
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoCreative Commons - Namensnennung 4.0