Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34620 
Year of Publication: 
2007
Series/Report no.: 
IZA Discussion Papers No. 3058
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We compare the returns to education (RTE) for entrepreneurs and employees, based on 19 waves of the NLSY database. By using instrumental variable techniques (IV) and taking account of selectivity, we find that the RTE are significantly higher for entrepreneurs than for employees (18.3 percent and 9.9 percent, respectively). We perform various analyses in an attempt to explain the difference. We find (indirect) support for the argument that the higher RTE for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education.
Subjects: 
Entrepreneurship
self-employment
returns to education employment
Document Type: 
Working Paper

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