Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35594
Authors: 
Douhan, Robin
van Praag, C. Mirjam
Year of Publication: 
2009
Series/Report no.: 
IZA discussion papers 4211
Abstract: 
We combine two empirical observations in a general equilibrium occupational choice model. The first is that entrepreneurs have more control than employees over the employment of and accruals from assets, such as human capital. The second observation is that entrepreneurs enjoy higher returns to human capital than employees. We present an intuitive model showing that more control (observation 1) may be an explanation for higher returns (observation 2); its main outcome is that returns to ability are higher in higher control environments. This provides a theoretical underpinning for the control-based explanation for higher returns to human capital for entrepreneurs.
Subjects: 
Entrepreneurship
ability
occupational choice
human capital
wage structure
JEL: 
L26
I20
J24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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