Age effect on entry to entrepreneurship: embedded in life expectancy
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Age effect on entry to entrepreneurship: embedded in life expectancy Kent Adsbøll Wickstrøm & Kim Klyver Maryam Cheraghi-Madsen
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Accepted: 13 August 2020 # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Major improvements in life expectancies associate with interesting societal transformations. By changing individuals’ preferences for engaging in both productive and non-productive activities across their lifespan, changes in life expectancy paradoxically affect both the financing and the costs of social welfare systems. This raises the importance of knowledge on how life expectancy affects the relationship between age and entry to entrepreneurship. Using lifespan theory, we propose a conceptual model for understanding how age-related psychological effects (i.e., risk-willingness and self-efficacy) on individuals’ entry to entrepreneurship are embedded in life expectancy at the societal K. A. Wickstrøm : K. Klyver Department of Entrepreneurship & Relationship Management, University of Southern Denmark, Universitetsparken 1, 6000 Kolding, Denmark
level. Based on data from 34 Organization for Economic Co-operation and Development countries, our analysis shows that increased life expectancy at the societal level moves the peak for entrepreneurial entry toward older ages and creates an evener entry distribution across working ages. The results suggest that this effect is driven partly by a cross-level moderation from life expectancy on the relationship between age and individuals’ risk-willingness and self-efficacy, which in turn promotes entry to entrepreneurship. These findings highlight the importance of considering entrepreneurial activity in the context of age and of future-time perspective in terms of life expectancy. Keywords Nascent entrepreneurship . Aging . Life expectancy . Future-time perspective . Remaining lifetime . Lifespan theory JEL classifications L26 . J10 . J14 . J24 . M13
K. A. Wickstrøm e-mail: [email protected]
1 Introduction K. A. Wickstrøm Sino-Danish Center for Education and Research, Beijing, China K. Klyver (*) Entrepreneurship, Commercialisation and Innovation Centre (ECIC), University of Adelaide, 9/10 Pulteney St, Adelaide, SA 5005, Australia e-mail: [email protected] M. Cheraghi-Madsen Independent research, Aarhus, Midtjylland, Denmark e-mail: [email protected]
With expanding worldwide developments in longevity (United Nations 2015), the association between age and entry into entrepreneurship becomes increasingly important for economic policy (Organization for Economic Cooperation and Development [OECD] 2017; OECD and European Commission 2012). Increases in life expectancies are accompanied by, among other things, forecasts of growing economic burdens from providing older people with physical and economic security
K. A. Wickstrøm et al.
(Bloom et al. 2015; Harper 2014). At the same time, the expectancy of a longer life may lead individuals to spend more time in the labor market (Chand and Tung 2014), including engaging in entrepreneurial activities.
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