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We study what type of entrepreneurs are affected by financial constraints by ex-
ploiting age-based discontinuities in the amount of funding available through a public
program for unemployed workers. Our sample links administrative data on 2.1 million
eligible workers to the firms they create, spanning a wide range of skills, sectors and
outcomes. We find that access to funding increases the rate of entrepreneurship and
that the effect is stronger for entrepreneurs who incorporate their business, especially
for those who were in the top decile of the wage distribution before unemployment.
Among incorporated entrepreneurs, the effect is strongest in the information and com-
munication sector, followed by manufacturing. In terms of ex-post outcomes, we find
that the effect is more pronounced for businesses in the upper half of the size, growth
and profitability distributions.