The disposition to become an entrepreneur and the jacks-of-all-trades in social and human capital

Abstract

This paper studies how an individual's composition of human and social capital affects his or her disposition to become an entrepreneur. Our theoretical analysis is an extension of Lazear's (2005) jack-of-all-trades theory in combination with the idea of bricolage of experiences and their effectuation in the disposition to become an entrepreneur. Our primary conclusion is that it is not individuals with a higher level of human or social capital but rather individuals with a more balanced and combined portfolio of human capital, social capital and experiences that are more disposed than others to become entrepreneurs. We use survey data from a sample of more than 2000 German students to test this hypothesis and find that the jacks-of-all-trades, i.e., individuals who are more balancing and combining different skills rather than specializing in a few, are more likely to become entrepreneurs. On the other hand, the masters-of-one, i.e., the specialists, are better off being employees and rightly prefer to do so.