Abstract

It is well established in prior literature that the human capital of individuals is important for both shaping their decision to enter the entrepreneurial process and also the likelihood to succeed in starting a business. Yet the decision to become an entrepreneur is not made in isolation to other career options. Human capital not only influences an individual’s prospects as an entrepreneur but also the chances of getting a better job (Gimone, Folta, Cooper, & Woo, 1997; Cassar, 2006; Shepherd et al., 2015). As such individual’s face an opportunity cost of paid employment when they pursue entrepreneurial endeavors (Carnahan, Agarwal, & Campbell, 2012; Lofstrom et al., 2014). We draw on theory of consideration set and theory of opportunity costs to expand our understanding of how human capital impacts entry to entrepreneurship from an isolated vocational decision perspective to a more holistic process perspective that takes into account alternative job alternatives. We develop a two-stage model of entry to entrepreneurship.

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