Olenka Kacperczyk

Abstract

Entrepreneurship can be described both as an occupation and as a single stage along a person’s career trajectory. While existing research has identified many factors that facilitate movement out of an established organization and into entrepreneurship, far less attention has been devoted to understanding what transpires during the return journey. Most notably, prior research has left unanswered the question of how employers evaluate entrepreneurial experience at the point of hire. We propose that employers penalize job candidates with a history of founding a new venture because they believe them to be worse fits and less committed employees than comparable candidates without founding experience. We further predict that the discount for having been an entrepreneur will diminish when other stereotypes about the candidate, and in particular based on their gender, will contradict the negative beliefs about ex-founders. We test our proposition a resume-based audit and an experimental survey. We find evidence that ex-founders receive significant penalty relative to non-founders because employers attach to them negative stereotypes about commitment to and fit for wage work but that the penalty is mitigated for women. Overall, these results contribute to a better understanding of how employers’ evaluations of ex-founders affect their chances at the point of return to wage work.