Opportunities and Entrepreneurship: Evidence on Advanced Labor Market Experience

We study the role of high-value temporary managerial jobs in generating occupational transition and business creation. Exploiting randomized lotteries for these government contracts in the Dominican Republic, we show lottery winners transition away from formal employment and start new and growing firms in the medium-run. A selection model, estimated on repeated application choices, reveals significant heterogeneous effects driven by younger individuals and those with higher revealed preference for the position. Counterfactual policies that increase business creation come at the cost of reducing opportunities for individuals who otherwise would not become entrepreneurs.