Risk, Balanced Skills and Entrepreneurship

This paper proposes that risk aversion encourages individuals to invest in balanced skillprofiles, making them more likely to become entrepreneurs. By not having taken this possiblelinkage into account, previous research has underestimated the impacts both of risk aversionand balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutchuniversity graduates provides evidence which supports this contention. It thereby raises thepossibility that even risk-averse people might be suited to entrepreneurship; and it may alsohelp explain why prior research has generated mixed evidence about the effects of riskaversion on selection into entrepreneurship....