The topic of the relationships between job creation expectations of new entrepreneurs and effective job creation by established entrepreneurs is of high interest in both theoretical and practical terms. Effective job creation by established entrepreneurs is expected to be lower than expected job creation by new entrepreneurs, because many new entrepreneurs are not able to achieve their objectives. However, institutional variables at the city level can affect the chances of survival and growth of entrepreneurs. This research uses the Penalty for Bottleneck (PFB) principle to identify a number of variables that may be blocking both job creation expectations and effective job generation in Colombia. Using these variables, cross- level effects at the city and individual levels are analyzed using a Hierarchical Linear Modeling (HLM) measurement strategy. The results confirm that cross level interactions exist and that city-level efforts to create a favorable environment for entrepreneurship do have effects upon the mechanisms that determine how individual characteristics of entrepreneurs affect their ability to create jobs.