Daniel Fehder

Abstract

Most startups are founded by employees who leave traditional employment, and many of these ventures subsequently fail. Thus, former entrepreneurs often re-enter traditional employment. We discuss whether the relationship between entrepreneurship experience and career progression in traditional employment will be different for men and women. Using LinkedIn’s Economic Graph Research Program data, we compare an individual’s career progression directly after entrepreneurship to their career directly before entrepreneurship. We find that female entrepreneurs are more likely to regress and less likely to advance in their careers than similar male entrepreneurs. Moreover, we find evidence of two potential demand-side explanations: (i) the gender composition at the firm-occupation level of the firm the entrepreneur is re-entering and (ii) the growth potential of the entrepreneur’s former startup. The career progression gap is heightened when women join firm-occupations with less female representation. Some of the career progression gap is also explained by the fact that women receive less career advancement credit for the quality of their startups. Finally, we document an important downstream consequence of gendered career progression: spillovers to workplace peers. Female workplace peers have higher positive rates of subsequent entrepreneurial entry than male workplace peers when female entrepreneurs join the firm. This spillover is strongest when female entrepreneurs enter a firm at higher levels of organizational hierarchy.