The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees

Frank Fossen and Tobias J. M. Büttner (tobias.buettner@bamf.bund.de)
Additional contact information
Tobias J. M. Büttner: Technical University of Berlin

No 6819, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We assess the relevance of formal education for the productivity of the self-employed and distinguish between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups because of different levels of control. We use the German Socio-economic Panel and account for the endogeneity of education and non-random selection. The results indicate that the returns to a year of education for opportunity entrepreneurs are 3.5 percentage points higher than the paid employees’ rate of 8.1%, but 6.5 percentage points lower for necessity entrepreneurs.

Keywords: returns to education; opportunity; necessity; entrepreneurship (search for similar items in EconPapers)
JEL-codes: I20 J23 J24 J31 L26 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-08
New Economics Papers: this item is included in nep-edu, nep-ent, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - revised version published in: Economics of Education Review, 2013, 37, 66-84

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Related works:
Journal Article: The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees (2013)
Working Paper: The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees (2013)
Working Paper: The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees (2012)
Working Paper: The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees (2012)
Working Paper: The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees (2012)
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