Are Education and Entrepreneurial Income Endogenous? A Bayesian Analysis
AbstractEducation is a well-known driver of (entrepreneurial) income. The measurement of its influence, however, suffers from endogeneity suspicion. For instance, ability and occupational choice are mentioned as driving both the level of (entrepreneurial) income and of education. Using instru-mental variables can provide a way out. However, two questions remain: whether endogeneity is really present and whether it matters for the size of the estimated relationship. Using Bayesian methods, we find that the relationship between education and entrepreneurial income is indeed en-dogenous and that the impact of endogeneity on the estimated relationship between education and income is sizeable. Implications of our findings for research and practice are discussed.
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Bibliographic InfoArticle provided by De Gruyter in its journal Entrepreneurship Research Journal.
Volume (Year): 2 (2012)
Issue (Month): 3 (July)
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Web page: http://www.degruyter.com
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- Fossen, Frank & Büttner, Tobias, 2013. "The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79691, Verein für Socialpolitik / German Economic Association.
- Rietveld, C.A. & Groenen, P.J.F. & Koellinger, Ph.D. & van der Loos, M.J.H.M. & Thurik, A.R., 2013. "Living Forever: Entrepreneurial Overconfidence at Older Ages," ERIM Report Series Research in Management ERS-2013-012-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
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