How Wealth and Age Interact to Affect Entrepreneurship

Mikhed, Vyacheslav; Raina, Sahil; Scholnick, Barry; d’Astous, Philippe

doi:10.21799/frbp.wp.2025.03

Working Paper

How Wealth and Age Interact to Affect Entrepreneurship

Abstract: Using wealth windfalls from lottery winnings and matched employer-employee tax files, we compare the effect of additional wealth on the entrepreneurial activity of older and younger individuals. We find that additional wealth leads older winners (aged 55 and older) to reduce business ownership and scale. In contrast, additional wealth leads younger winners to increase business ownership and performance. We also show that extra lottery wealth reduces the wage labor supply of both younger and older individuals. Thus, while younger lottery winners reduce wage labor to increase entrepreneurship, older lottery winners reduce both wage labor and entrepreneurship to retire

Keywords: Wealth; Age; Entrepreneurship; Labor Supply;

JEL Classification: G5; G51; J22; L26;

https://doi.org/10.21799/frbp.wp.2025.03