We study entrepreneurs’ behavioral responses of effort (moral hazard) to avoid business failure.This is done in the …

the importance of skills for the entrepreneurs who employ those workers, and in particular on their evolution over time …, heterogeneous firm model à la Lucas (1978): technological change does not benefit all potential entrepreneurs equally, and there is …. Because wages rise for all workers, low-productivity entrepreneurs will then at some point exit and become workers. As a …

development of the number of entrepreneurs in an equilibrium framework and (ii)the approach focusing on the entries and exits of … entrepreneurs. In this paper we unify these ap-proaches to arrive at a model explaining the equilibrium and actual number of … entrepreneurs and theentry and exit rate of entrepreneurs simultaneously and consistently. We apply our unified approach tothe …

change does not benefit all potential entrepreneurs equally, and there is a positive relationship between an individual … entrepreneurs exit and become workers. Quantitatively, the model fits both the U.S. time series experience and cross …