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Abstract
Entrepreneurship is an age-dependent phenomenon. We still lack clear evidence on how the age-entrepreneurship relationship is precisely shaped, whether this shape changes over generations, and to what extent it differs between countries. By disentangling age effects from cohort and year effects, we investigate how entrepreneurship varies across the life cycle in Germany, the UK, and the US, using large harmonized individual-level panel data from 1992 to 2019. We show that there are uniform age profiles across cohorts for each country, while there are several differences between the three countries in terms of the steepness and the precise peak of each slope. We further reveal that the separability assumption holds, but only for the age range from 25 to 60 years. This implies that there are country-specific, uniform life-cycle trajectories for entrepreneurship until the threshold of 60 years. Secondly, rather than a downward slope immediately after midlife, we observe a stable ageentrepreneurship relationship, followed by a delayed downward slope at higher ages where cohort-specific exit behaviors take over after the age of 60. We further identify generational differences in the probability of being entrepreneurially active. The level of entrepreneurial activity appears to be higher among Generation Y in the US and Germany than among Generation X, but not in the UK.
Keywords: Entrepreneurship, age, age-period-cohort effects
