Entrepreneurial talent, occupational choice, and trickle up policies

• 成果类型: Article
• 署名作者: Ghatak, Maitreesh; Morelli, Massimo; Sjoestroem, Tomas
• 署名单位: University of London; London School Economics & Political Science; University System of Ohio; Ohio State University; Rutgers University System; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2006.02.007
• 发表日期: 2007
• 页码: 27-48
• 关键词: Occupational choice; adverse selection; entrepreneurial talent

摘要

We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurial talent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurship because of adverse selection. The severity of this problem depends on the outside option of entrepreneurs, which is working for wages. This links credit, product and labor markets. A rise in wages reduces the adverse selection problem. These multimarket interactions amplify productivity shocks and may generate multiple equilibria. If it is impossible to screen entrepreneurs then all agents unanimously support a tax on entrepreneurs that drives out the less talented ones. However, if screening is possible, e.g., if wealthy entrepreneurs can provide collateral for their loans, then wealthy entrepreneurs do not support surplus enhancing taxes. (c) 2006 Elsevier Inc. All rights reserved.