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Market-Based Solutions to Vital Economic Issues
Research
Jun 1, 2014

Who Works for Startups? The Relation between Firm Age, Employee Age and Growth

Abstract

Young firms disproportionately employ and hire young workers. Young employees in young firms tend to earn higher wages than in older firms. Young employees disproportionately join young firms with greater innovation potential and that exhibit higher growth, conditional on survival. We argue that the skills, risk tolerance, and joint dynamics of young workers contribute to their disproportionate share of employment in young firms. Moreover, an increase in the supply of young workers is positively related to new firm creation in high-tech industries, supporting a causal link between the supply of young workers and new firm creation.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals


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