4.

Age and entrepreneurial aspirations

While human capital investments influence the employment choice decision age also
influence the point of entry for instance, when should individuals enter

The question how age influences entrepreneurial behavior could be examined from an
employment choice perspective. As an employment choice decision, there is a long tradition
of research that highlights the significance of risk attitude in the choice of entrepreneurship
over wage employment. However, most studies do not take into account the interplay
between risk and age in influencing the employment choice decision over an individuals life
span. In general, what is known about the relationship between age and risk is that the
attitude towards risk changes over lifetime with a decrease in aptitude for risk with increasing
age (Josef et al., 2016). If the same applies to the employment choice, it can be surmised that
as individuals grow older they are less likely to choose entrepreneurship over wage
employment. Levesque and Minniti (2006) proposed that the dynamic interplay between age,
risk and the employment choice decision can be explained if time is taken into account.
Based on Beckers time allocation model, the authors premise that as time is an important
and finite resource individuals prefer an income producing activity that produce the highest
expected utility within a given time span, in this case the life span of the individual (Levesque
and Minniti, 2006). Moreover, as entrepreneurship do not produce an instant (and riskless)
return, the older an individual gets the lesser is the time to enjoy the future returns from
business activity. This reduces the attractiveness of entrepreneurship over wage employment,
as an individual grows older. By incorporating time, Levesque and Minniti (2006) theoretical
model suggests that in addition to attitude towards risk, activities that involve a time
commitment component before producing an income such as new business are penalized
with respect to activities with immediate payoffs such as wage employment.

However, it should also be noted that the ability to pursue entrepreneurship is likely to
increase with age as individuals develop or acquire the human, social and financial capital
over time (Curran and Blackburn, 2001; Fairlie and Krashinsky, 2012). Taking into account
the empirical evidence of a peak age for entrepreneurship there would be an optimal time in
the life of an individual in which risk aversion and the emphasis on time is of moderate
influence. This period would be the optimal time to become an entrepreneur. Hence, the
preference for entrepreneurship when one is comparatively younger. Similarly, although
mature individuals are generally more likely to be able to create a business than younger
individuals, they are less likely to be willing to do it (Curran and Blackburn, 2001).