The higher returns to formal education for entrepreneurs versus employees in Australia

Jolanda Hessels, Cornelius A. Rietveld, Roy Thurik and Peter van der Zwan

Journal of Business Venturing Insights, 2020, vol. 13, issue C

Abstract: Van Praag et al. (2013) analyze whether the returns to formal education in terms of income differ between entrepreneurs and employees. Using US data (1979–2000), they find that entrepreneurs have higher returns to formal education than employees. They also find evidence that the level of personal control in one’s occupation explains these higher returns. In the present study, we aim to replicate these findings using a dataset from a different country (Australia) and time period (2005–2017). Moreover, we extend the study by Van Praag et al. (2013) by distinguishing between entrepreneurs with and without employees. In accordance with Van Praag et al. (2013), we also find higher returns to education for entrepreneurs compared to employees. However, this finding mainly applies to the entrepreneurs without employees. Moreover, we do not find evidence for a mediating role of personal control in this relationship.

Keywords: Entrepreneurship; Self-employment; Education; Income; Job control; Earnings (search for similar items in EconPapers)
JEL-codes: J24 J31 L26 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:13:y:2020:i:c:s2352673418301094

DOI: 10.1016/j.jbvi.2019.e00148

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