Troubled Teens Can Turn Into Great Entrepreneurs

People who engaged in illicit activities as teenagers and scored high on learning aptitude tests have a higher tendency to become entrepreneurs than their rule-abiding counterparts, according to new research.

August 19, 2013

NEW YORK – Sometimes breaking the rules pays.

The Wall Street Journal reported on a working paper published by the National Bureau of Economic Research, where economists Ross Levine and Yona Rubinstein examine what it takes to become an entrepreneur and whether entrepreneurship pays off in terms of wages. They looked at the cognitive, noncognitive and family traits of self-employed individuals who have incorporated businesses and compare it to the characteristics of salaried workers and the self-employed who don’t have incorporated businesses.

What the researchers found is that that self-employed workers with incorporated businesses were almost three times more likely to engage in illicit and risky activities as kids than salaried workers, notes the Journal. Such behaviors include shoplifting, marijuana use, skipping school, dealing drugs and assault. The self-employed with incorporated businesses also showed greater self-esteem, scored higher on learning aptitude tests, were more educated and were more likely to come from high-earning, two-parent families than other employment types.

According to the research: “[A]pparently it takes more to be a successful entrepreneur than having these strong labor market skills: the incorporated self-employed also tend to engage in more illicit activities as youths than other people who succeed as salaried workers. It is a particular mixture of traits that seems to matter for both becoming an entrepreneur and succeeding as an entrepreneur. It is the high ability (as measured by learning aptitude and success as a salaried worker) person who tends to ‘break-the-rules’ (as measured by the degree to which the person engaged in illicit activities before the age of 22) who is especially likely to become a successful entrepreneur.”

Of course these qualities do have a downside: “Risk-taking tendencies in combination with high self-esteem make successful entrepreneurs prone to dangerous lapses in judgment,” notes the Journal.

Advertisement
Advertisement
Advertisement