CEP LSE RSS Contact Us YouTube Facebook Twitter

Abstract:

cover
CentrePiece Article
In brief...'Smart and illicit': the making of a successful entrepreneur
Ross Levine and Yona Rubinstein
December 2013
Paper No' CEPCP399:
Full Paper (pdf)

CentrePiece 18 (2) Autumn 2013


JEL Classification: L26;J24;J3;G32


Tags: self-employment; occupational choice; compensation; firm organization; corporate finance; cognitive and noncognitive traits

Smart teenagers who engage in illicit activities are much more likely to become entrepreneurs, according to research by Ross Levine and Yona Rubinstein. But, they note, being self-employed doesn’t necessarily make someone an entrepreneur: recognising this distinction has enabled them to detect both the key characteristics of successful entrepreneurs and the true rewards to their innovations. The incorporated self-employed earn much more per hour and work many more hours than people on salaries and the unincorporated self-employed. To measure illicit activities, the study uses survey data on skipping school, using alcohol and marijuana, vandalism, shoplifting, drug dealing, robbery, assault and gambling. The point is not that these are desirable activities or that parents should help their kids get involved in them to encourage entrepreneurship: rather, they can be used to gauge someone’s inclination to build and lead a successful and innovative business.

This article summarises ‘Smart and Illicit: Who Becomes an Entrepreneur and Does it Pay?’ by Ross Levine and Yona Rubinstein, CEP Discussion Paper No. 1237.