Reading Comprehension Quiz for IBPS AFO 2026

Practice important Reading Comprehension MCQs for IBPS AFO 2026. Sharpen your English preparation with topic-wise questions and detailed explanations.

Performance Analysis

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Question 1 of 5 1 / 5
Passage
Direction: Read the passage given below and answer the questions that follow.
Common research findings suggest that entrepreneurship is rarely worth the financial risk, at least in strictly monetary terms. Thankfully, plenty of people take the plunge anyway. Many people nevertheless pursue self-employment, drawn by a desire for independence or the chance to follow a personal passion. However, the conventional view that self-employment does not pay off has been challenged by a study by Gustavo Manso at the University of California, Berkeley. Manso finds that self-employment does yield financial benefits β€” not from the venture itself, but in the form of higher wages when the entrepreneur later returns to the workforce.
Standard research compares self-employed workers to salaried workers controlling for education and similar factors, and typically finds self-employed people earn less on average β€” hence the finding that entrepreneurship is not worth it financially. Manso's approach was different: he tracked more than 5,000 Americans between 1979 and 2012. The average annual earnings for a self-employed person were higher than for a salaried worker, while the median was lower β€” consistent with a small number of highly successful entrepreneurs pulling the average up.
According to Manso's data, most entrepreneurs eventually return to salaried work; just over half of self-employment [______] last for two years or less. Looking at lifetime earnings, those who had been self-employed at one point fared better than similar workers who had not. β€œIndividuals who attempt to be employees but abandon entrepreneurship in less than two years are not punished, achieving approximately the same earnings as similar individuals who have not attempted to be entrepreneurs,” he reports. β€œAt the same time, entrepreneurs who stay longer than two years make substantially more than similar salaried workers.”
Overall, Manso concludes that entrepreneurs earn approximately 10% more than salaried workers with similar characteristics. His theory of why people try entrepreneurship and then return to the labour market hinges on experimentation. Stepping away from a job to start a company offers a chance to experiment with a new idea. If it works, the entrepreneur stays self-employed; if not, they get another job. The data cannot explain why that next job pays as much or more than if they had never been self-employed. β€œMaybe the skills developed during a self-employment spell are useful as a salaried worker,” Manso noted.
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According to the author, how can entrepreneurship pay off in financial terms?
Solution & Explanation Two financial pay-offs are cited: (a) entrepreneurs who stay beyond two years earn substantially more (option 2), and (b) skills from self-employment are valued by the labour market on re-entry (option 3). Both mechanisms are explicitly mentioned in the passage.

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