Thursday, Sep 10, 2026 The claims desk. Receipts included. POWERED BY LENZ ↗
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Employees at startups and young or small firms earn lower average wages than at established employers.

The Claim

Entrepreneurship creates jobs with higher average wages than wage employment in the same labor market.

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The Short Version

The evidence points in the opposite direction. Research that directly examines wages paid by startups and young/small firms generally finds lower average pay than at established employers in the same labor market. The claim appears to substitute entrepreneurs’ own income for employee wages, but those are different measures and do not support the stated conclusion.

Caveats

  • Do not confuse entrepreneurs’ personal income with the wages paid to employees at entrepreneurial firms.
  • Average self-employment income is skewed by a small number of very high earners, so it is not a reliable proxy for typical outcomes.
  • Young and small firms may create many jobs, but job creation does not imply those jobs pay higher wages.

The Receipts

  1. Statistics of Income: Individual Income Tax Returns Complete Report (Publication 1304)

    Internal Revenue Service

  2. Tax data reveal rewards and risks of self-employment

    Minneapolis Fed

  3. Comparing Survey and Administrative Measures of Self-Employment Income

    PubMed Central

  4. Firm Size and Employment during the Pandemic

    Proceedings of the National Academy of Sciences (via PMC/NIH)

  5. The Effects of Job Quality on the Health of Wage Workers

    NIH / International Journal of Environmental Research and Public Health

  6. Entrepreneurial Wages

    NBER

  7. THE ECONOMIC IMPACT OF STARTUPS

    KCSourceLink

  8. Job Quality and Employer Practices: Evidence from B Corporations

    WorkRise Network / Urban Institute

  9. Wage Employment, Unemployment and Self-Employment across Industrialized Countries

    IZA Institute of Labor Economics

  10. On the Nature of Entrepreneurship

    National Bureau of Economic Research

+ 12 more sources — see the full list on Lenz

Filed Under

EntrepreneurshipLabor MarketWage Employment

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