The Economic Returns to Entrepreneurship – Implications for Stimulating Entrepreneurship

Thomas Astebro

Working Papers from HAL

Abstract: Recent evidence comparing earnings from entrepreneurship versus wage earning shows that, after allowing for obvious observable differences, most entrepreneurs in most developed countries earn less than similar wage-earning employees. Does this mean that the decision to become an entrepreneur should be discouraged? The answer depends in part on whether we believe that entrepreneurs report their income truthfully or not. Adjusting for what is considered to be underreporting by entrepreneurs lifts entrepreneurial earnings by between 10% and 40%, reversing the fortunes of the entrepreneur such that they appear to be earning much more than their counterparts in a wage-earning job. If this adjustment should prove to be appropriate, then there is no obvious reason to increase the incentive for individuals to become entrepreneurs (such as with tax breaks or direct start-up subsidies) in developed countries, and there is reason, instead, to discuss decreasing these subsidies.

Keywords: Entrepreneurship; income underreporting; public policy (search for similar items in EconPapers)
Date: 2013-05-01
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The Economic Returns to Entrepreneurship – Implications for Stimulating Entrepreneurship (2013)
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:hal:wpaper:hal-01947456

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().