The return-to-entrepreneurship puzzle

Hyytinen, Ari and Ilmakunnas, Pekka and Toivanen, Otto (2011): The return-to-entrepreneurship puzzle.

Abstract

The returns to entrepreneurship are monetary and non-monetary. We offer new evidence on these returns using a large sample of genetically identical male twins. Our within-twin analysis suggests that OLS estimates are downwards, and traditional first-differenced panel data estimates upwards biased. We find no differences in the earnings of men with either low or high education. Our within-twin analysis of non-monetary returns shows that entrepreneurs with low education work longer hours and have greater responsibilities, but also face a reduced risk of divorce and less monotonous work tasks. The same does not apply to highly educated entrepreneurs.

• Item Type: MPRA Paper
• Language: English
• Keywords: entrepreneurship; earnings; twin data; education; monetary returns; nonmonetary returns; selection
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship

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