This study investigates how a comprehensive set of socio-emotional skills (the Big Five personality traits, locus of control, risk preference, time preference, and trust) shapes not only the decision to enter entrepreneurship, as measured by self-employment and incorporated self-employment, but also informs individuals’ ability to sustain the entrepreneurial state over time. Drawing on longitudinal data from the Australian HILDA Survey, we introduce two time-sensitive indices to measure entrepreneurship, chronicity and persistence, alongside conventional static measures of self-employment and incorporated self-employment. Results show that risk preference consistently emerges as the strongest predictor of entrepreneurial entry and persistence, while the roles of other socio-emotional traits are smaller and less consistent. Heterogeneity analyses suggest these results offer important caveats on the gender dimension of entrepreneurship. These findings remain robust under extensive sensitivity and bounds tests, underscoring the central role of risk preference in sustaining entrepreneurial activity. • This study develops a time-sensitive measure of entrepreneurship, introducing the concept of “chronicity” and “persistence” to capture dynamic entrepreneurial behaviour. • Openness to experience influences entrepreneurial entry but not persistence, highlighting the temporal specificity of traits. • Locus of control predicts persistence in incorporated self-employment but not entry into entrepreneurship. • Other socio-emotional skills, including trust and time preference, show limited effects. • Risk preference and openness emerge as the most consistent predictors of entrepreneurial entry, duration and persistence. • Results are validated through Oster (2019) and Diegert et al. (2023) sensitivity analyses, confirming robustness to omitted variable bias.
Sinha et al. (Tue,) studied this question.