Does working at a start-up pay off?

Abstract

"Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining startups 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's abstract, IAB-Doku) ((en))

Cite article

Fackler, D., Hölscher, L., Schnabel, C. & Weyh, A. (2020): Does working at a start-up pay off? (IZA discussion paper 13033), Bonn, 31 p.