Munich Personal RePEc Archive

The return-to-entrepreneurship puzzle

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


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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.

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