An interesting piece from Bloomberg’s Noah Smith:
“…when it comes to
entrepreneurship, there’s another factor that’s probably a lot more important
than effort. It’s risk.
For a prospective
entrepreneur, the choice usually isn’t between starting a business and playing
video games -- it’s between starting a business and working for someone else.
The difference in effort between those two career paths probably isn’t that
big. But entrepreneurship is much, much riskier than holding a job. In general,
you’re a lot more likely to see your business fail than to be fired…
So if the risk theory is right, a stronger safety net should lead to more entrepreneurial activity, not less. Whatever negative effect public assistance has on effort will be more than canceled out by the greater risk-taking capacity of the poor and unemployed.”
So if the risk theory is right, a stronger safety net should lead to more entrepreneurial activity, not less. Whatever negative effect public assistance has on effort will be more than canceled out by the greater risk-taking capacity of the poor and unemployed.”