This paper examines how working in high-growth young firms shapes workers’ career trajectories. While employees of young firms often earn less in the long-term than those in established firms, high-growth young firms can offer skill development to workers that can translate into long-term positive effects on earnings. The challenge in capturing these potential positive effects is identifying high-young firms early on. Existing research often relies on hindsight by using the eventual success of startups to gauge career outcomes, which overlooks the learning potential in high-growth young firms that fail. This study takes a novel approach by using business accelerators, which identify and support high-growth young firms, as research laboratories. We conduct two types of analyses: a cross-program study of long-term job positions reported in LinkedIn among workers in accelerator-backed and non-accelerator-backed firms across the Americas, and a detailed analysis using administrative long-term wage data from participants in Colombia's ValleE accelerator. The findings from the cross-program approach show that within four years of acceleration, employees experience significant changes in the skills required for their new job roles relative to similar workers in matched control firms. There is a notable increase in cross-functional skills related to resource management, systems, and social interactions, alongside a decline in technical skills. Additionally, employees are more likely to take on managerial and entrepreneurial roles. These shifts result in higher expected wages, and do not come at the expense of lower employability, thus translating into overall average annual expected earnings increases of 5.3% in the three years after acceleration. The findings from the ValleE setting based on administrative wage data broadly confirm the patterns in wages and employability, and are robust to exploiting quasi-experimental variation in participation to the program. We interpret these findings as suggesting that business accelerators offer employees a unique intensified “startup experience,” where the rapid growth or closure undergone during the program amplifies the typical learning opportunities found in high-growth young firms. We see less consistent evidence for other possible explanations for these career benefits after acceleration, such as pure selection effects, or other causal mechanisms like certification, validation, or networking.

Abstract In this paper we develop a new rationale for the existence of business groups (BGs) and conglomerates that operate in multiple locations within the same country: They arbitrage local labor markets. We show that BG firms grow less if firms of the same group in other locations can offer more attractive access to employees in their local labor market. On the flip side BG firms grow faster if they offer such access to other firms in the group. Attractiveness is measured as labor costs, labor supply, and labor fit between the firm and the local labor force. Local labor conditions are of similar importance for location decisions of business group firms as general agglomeration economies. Internal flows of employees between BG firms account for only a small portion of the variation in employment growth rates. We conclude that business groups predominantly move jobs, but not employees, between their locations. As such, they arbitrage local labor markets.

The recent pandemic accelerated a paradigm shift in labor markets towards non-traditional employment arrangements, with flexibility increasingly developing into a critical differentiating factor. We study the impact of the “Great Reshuffling” on transitions into entrepreneurship using administrative data from U.S. tax returns. We find a large increase in entry to entrepreneurship, particularly for women and women with dependents. We examine the role of childcare disruptions, remote work availability, and displacement, finding support in favor of the pandemic-driven increase in childcare responsibilities as a primary factor. We show that transitions are persistent and lead to higher income for women. The pandemic shifted the composition of firms in the economy towards digital retail stores. Firms started by women survive more and have higher profitability. Overall, the results indicate that the pandemic shifted individuals’ preferences towards work.