A consumption-based measure of the monetary rewards to entrepreneurship

Dmitriy Krichevskiy ()
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Dmitriy Krichevskiy: Department of Economics, Florida International University

No 1005, Working Papers from Florida International University, Department of Economics

Abstract: Recent findings by Hamilton (Journal of Political Economy, 2000) suggest that the self-employed do not receive a monetary premium for the risk and uncertainty associated with business ownership. In this paper, I show that that income underreporting by entrepreneurs can explain the lack of evidence for monetary premia. Using a large national dataset (PSID), I first document evidence of underreporting, and then proceed to make alternative comparisons using measures of consumption. I find that the self-employed enjoy large earnings premia that are reflected in their consumption.

Keywords: Entrepreneurship; self-employment; income comparison; income underreporting (search for similar items in EconPapers)
JEL-codes: J23 J24 J31 L26 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-12
New Economics Papers: this item is included in nep-ent
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http://casgroup.fiu.edu/pages/docs/1567/1292249368_10-05.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1005

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