Three essays on entrepreneurial entry, serial entrepreneurship, and labor turnover

This study explores two important aspects of entrepreneurship — liquidity constraints and serial entrepreneurs, with an additional analysis of occupational choice among wage workers. In the first essay, I revisit the question of whether entrepreneurs face liquidity constraints in business formation. The principle challenge is that wealth is correlated with unobserved ability, and adequate instruments are often difficult to identify. This paper uses the son's birth order as an instrument for household wealth. I exploit the data available in the Korean Labor and Income Panel Study, and find evidence of liquidity constraints associated with self-employment in South Korea. The second essay develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing. Motivated by previous empirical findings that white-collar workers had higher turnover rates than blue-collar workers during firm expansion, the third essay further examines job turnover among workers with or without specific skills. I present a search-matching model, which predicts that when firm growth is driven by technological advance, workers whose skills are specific to the obsolete technology show a higher tendency to separate from their jobs. This hypothesis is tested with data from the PSID. I find supportive evidence that in the context of technological change, having an occupation requiring specific skills, such as computer specialists or engineers, increases the odds of job separation by nearly eight percent. ^

The civil war of ideas: Ayn Rand, intellectual freedom, and the regulation of thought in the Soviet Union and United States, 1905-1943

The philosopher and novelist Ayn Rand (1905–1982) is an icon of American culture. That culture misunderstands her, however. It perceives her solely as a pure market conservative. In the first forty years of her life, Rand's individualism was intellectual and served as a defense for the free trade of ideas. It originated in the Russian Revolution. In 1926, when Rand left the Soviet Union, she developed her individualism into an American philosophy. Her ideas of the individual in society belonged to a debate where intellectuals intended to abolish the State and free man and woman from its intellectual snares. To present Rand as a freethinker allows me to examine her anticommunism as a reaction against Leninism and to consider the relation of her ideas to Marxism. This approach stresses that Rand, as Marx, opposed the State and argued for the historical importance of a capitalist revolution. For Rand the latter, however, depended on an entrepreneurial class that rejected Protestantism as ideology – which she contended threatened its interests because Christianity had lost its historical significance. This exposes the nature of Rand's intellectual individualism in American society, where the majority on the entire political spectrum still identified with the teachings of Christ. It also reveals the dynamics of her anticommunism. From 1926 to 1943, Rand remodeled American individualism and as she did so, she determined her opposition first to the New Deal liberals and second business conservatives. To these ends, Marxism and Protestantism served Rand's individualism and made her an American icon of the twentieth century.