Edited by David B. Audretsch, Oliver Falck, Stephan Heblich and Adam Lederer
Chapter 4: Who Values the Status of the Entrepreneur?
Mirjam van Praag INTRODUCTION Recent research reveals the relevance of (inter)personal factors in occupational choice preference development. For instance, empirical studies by Falck et al. (2008) as well as Nanda and Sørensen (2008) address identity and peer group effects as determinants of the choice for entrepreneurship. Parker and Van Praag (2009) show, based on theory, that the group status of ‘entrepreneurship’ shapes people’s occupational preferences and thus their choice behavior. Moreover, the status of entrepreneurship enters individuals’ utility functions, leading to a spillover effect: while people base their occupational decisions on their own relative utility from entrepreneurship versus employment, their decisions may simultaneously affect the composition and status of the profession. This chapter addresses empirically the following explorative questions: does perceived occupational status affect occupational choice or preferences and, in particular, the choice and preferences for entrepreneurship? What are the determinants of occupational status? Which (job) characteristics affect status? What individual characteristics determine an individual’s view on the status of the entrepreneurial profession? Are the individual determinants of their perceived status of the entrepreneurial profession related to the determinants of the choice and preferences for entrepreneurship? These questions are addressed using the results of a survey of 800 university students in the Netherlands. Answering these questions is instructive: if it is the case that individual choices are affected by perceived status, one can affect choices by changing status. In particular, the study of the occupational or personal determinants of status may reveal where to start changing status and...
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