Working Paper: CEPR ID: DP13954
Authors: Patrick Legros; Andrea Canidio
Abstract: Each job can be performed in several ways, which we call tasks An agent's performance at a task is informative about his productivity at different tasks. But tasks are not contractible: choosing tasks is the prerogative of management within firms, and of the agent if he is an entrepreneur. Firms will invest in the discovery of their workers' productivity at different tasks only if they cannot easily move to other firms. Therefore, labor-market frictions determine whether learning an agent's talent occur within firms, or whether an agent may become an entrepreneur to acquire task discretion.
Keywords: task discretion; organizational choice; entrepreneurship; labor market frictions; entrepreneurial failures; learning
JEL Codes: D83; J24; J62; J63; L26; M13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor market frictions (J29) | likelihood of entrepreneurship (L26) |
| Labor market frictions (J29) | allocation of workers to informative tasks (J29) |
| allocation of workers to informative tasks (J29) | likelihood of entrepreneurship (L26) |
| Labor market frictions (J29) | decision to pursue entrepreneurship (L26) |
| high labor market frictions (J49) | fewer entrepreneurs (L26) |
| low labor market frictions (J49) | increase in entrepreneurship (L26) |