Are entrepreneurs penalized during job searches? It depends on who is hiring
Waverly W. Ding, Hyeun J. Lee, Debra L. Shapiro
Strategic Entrepreneurship Journal · 2023 · Volume 17 · Issue 4
Abstract
How do job-applicants with entrepreneurship experience—“post-entrepreneurs”—fare in the wage labor job market? We propose an “entrepreneurship-experience penalty” generally occurs yet varies in strength depending on the recruiters faced by post-entrepreneurs in their job application process. In an experiment utilizing the selection-decisions of 275 recruiters (experimental study participants) in reaction to objectively-identical job-applicants' resumes whose differences relate to whether their last-held job was as aFounderor as anExecutive, we found that: (a) resumes of Founders (compared to Executives) are about 23%–29% less likely to be picked as top-choice for hire, (b) this entrepreneurship penalty is weaker for recruiters with (rather than without) entrepreneurial aspirations, and (c) this recruiter moderator-effect is stronger for recruiters in smaller (rather than larger) firms.
Keywords
entrepreneurship penalty, firm size effect, ingroup favoritism, return-to-entrepreneurship, selection-and-recruitment
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