Early Career Choices of Superstar Entrepreneurs

Using a dataset on career paths of elite U.S. engineers, including superstar entrepreneurs, we examine the effect of early career choices on long-run entrepreneurial outcomes. Exploiting exogenous variation in entry labor market conditions, driven by local financial sector growth, and comparing classmates in the same school-major-year, we find that talented engineers are more likely to switch from engineering jobs to finance in high finance growth areas. Compared to classmates who remain in engineering, these individuals create fewer startups that are large employers, receive VC funding, are acquired, and issue patents. A quasi-experimental design using state-wise banking deregulation produces similar results