Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs

Fabiano Schivardi and Claudio Michelacci
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Claudio Michelacci: EIEF

No 1163, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We study how the educational composition and the return to education of US entrepreneurs has evolved since the late 80's. The fraction of entrepreneurs with a college degree has increased, while the fraction of entrepreneurs with a post-college degree has remained stable over time at around one third. The premium of having a college degree relative to a high school degree has increased, but roughly as much as the analogous premium for workers. The premium for postgraduate education relative to college education has increased substantially more for entrepreneurs than for workers: now an entrepreneur with a post-graduate degree earns more than twice us much as he used to earn in the 90's. The analogous percentage increase for entrepreneurs with a college degree is just 50 percent. The sharp increase in the skill premium for entrepreneurs with post-graduate education is partly due to the higher value of their businesses (in terms of dividend payments and firm valuation) and partly due to the greater speed at which they sell their businesses. The premium to post-graduate education has remained high during the Great Recession and is still present when looking at the higher deciles of the entrepreneurs income distribution.

Date: 2016
New Economics Papers: this item is included in nep-edu and nep-ent
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Related works:
Journal Article: Are they all like Bill, Mark, and Steve? The education premium for entrepreneurs (2020)
Working Paper: Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs (2017)
Working Paper: Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs (2017)
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