Entrepreneurial School Dropouts: A Model on Signalling, Education and Entrepreneurship

Jens Fredrik Baumgarten Skogstrøm ()
Additional contact information
Jens Fredrik Baumgarten Skogstrøm: Ragnar Frisch Centre for Economic Research,, Postal: Ragnar Frisch Centre for Economic Research, Gaustadalleen 21 , 0349 Oslo, Norway

No 10/2012, Memorandum from Oslo University, Department of Economics

Abstract: I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population.

Keywords: Entrepreneurship; self-employment; education; ability (search for similar items in EconPapers)
JEL-codes: J24 L26 M13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2012-04-02
New Economics Papers: this item is included in nep-cta, nep-edu, nep-ent, nep-lab, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.sv.uio.no/econ/english/research/unpubl ... 012/Memo-10-2012.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2012_010

Access Statistics for this paper

More papers in Memorandum from Oslo University, Department of Economics Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Mari Strønstad Øverås ().