Entrepreneurship over the business cycle

- Documented necessity entrepreneurship in downturns could be incorrectly interpreted.
- This is because employment is more sensitive than self-employment to business cycle.
- Graduating in recessions reduces entrepreneurship probability for the next 11 years.
- But this does not lower the probability of starting a business over the life cycle.

The fraction of self-employed rises in recessions because wage work is more sensitive than self-employment to the business cycle, not because of necessity entrepreneurship. Graduating during a recession reduces the probability of starting a business for the next 11 years.