Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/86709 
Year of Publication: 
2009
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 09-088/4
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
Education is argued to be an important driver of the decision to start a business. The measurement of its influence, however, is difficult since it is considered to be an endogenous variable. This study accounts for this endogeneity by using an instrumental variables approachand a data set of more than ten thousand individuals from 27 European countries and the US. Theeffect of education on the decision to become self-employed is found to be strongly positive,much higher than the estimated effect in case no instrumental variables are used. That is, thehigher the respondent's level of education, the greater the likelihood that he/she starts a business.Implications for entrepreneurship research and practice are discussed.
Subjects: 
Occupational choice
entrepreneurial choice
education
self-employment
endogeneity
instrumental variables
JEL: 
C35
I20
J24
L26
Document Type: 
Working Paper

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