Template-Type: ReDIF-Paper 1.0
Title: Successful Entrepreneurs Come From the Top of the Earned Income Distribution
Author-Name: Niklas Garnadt
Author-Email: niklas.garnadt@gcee.de
Author-Name: Lena Füner
Author-Email: lena.fuener@zew.de
Author-Name: Konrad Stahl 
Author-Email: konrad.stahl@uni-mannheim.de
Author-Name: Joacim Tag
Author-Email: joacim.tag@ifn.se
Classification-JEL: L26, L35, L53, J24, E32
Keywords: Entrepreneurship, high-growth startups, labor income, unemployment

Abstract: 
Identifying high growth startups ex-ante and fostering their success is an important policy challenge. Using Swedish registry data, we show that previous labor
market earnings of entrepreneurs is a simple observable that is strongly correlated with entrepreneurship success. Entrepreneurs from the top decile of income
from dependent employment are four times more likely to succeed than those from the lowest decile. Their firms are larger and more productive from the
outset, and this effect intensifies over time. This correlation is virtually unaffected by variations in the entrepreneurs’ personal traits. It does also not vary across
the business cycle.

Note: 
Length: 19
Creation-Date: 2025-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp693
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_693