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The return-to-entrepreneurship puzzle

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  • Hyytinen, Ari
  • Ilmakunnas, Pekka
  • Toivanen, Otto

Abstract

The returns to entrepreneurship are monetary and non-monetary. We offer new evidence on these returns using a large sample of male twins. Our within-twin analysis suggests that OLS estimates are downwards, and panel data estimates upwards biased. The within-twin estimates imply that entrepreneurs earn a negative earnings premium. Our within-twin analysis of non-monetary returns shows that entrepreneurs work longer hours and have greater responsibilities, but also have a greater control over their work.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 20 (2013)
Issue (Month): C ()
Pages: 57-67

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Handle: RePEc:eee:labeco:v:20:y:2013:i:c:p:57-67

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Entrepreneurship; Earnings; Twin data; Monetary returns; Non-monetary returns; Selection;

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  16. Nicolaou, Nicos & Shane, Scott, 2009. "Can genetic factors influence the likelihood of engaging in entrepreneurial activity?," Journal of Business Venturing, Elsevier, vol. 24(1), pages 1-22, January.
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Cited by:
  1. van Praag, Mirjam & van Witteloostuijn, Arjen & van der Sluis, Justin, 2009. "Returns for Entrepreneurs vs. Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vs. Wage Employees," IZA Discussion Papers 4628, Institute for the Study of Labor (IZA).
  2. Bockerman, Petri & Vainiomäki, Jari, 2012. "Stature and life-time labor market outcomes: Accounting for unobserved differences," MPRA Paper 42220, University Library of Munich, Germany.
  3. Michael Wyrwich, 2013. "In the name of my parents: Entrepreneurship and the intergenerational transmission of values," Jena Economic Research Papers 2013-031, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Lechmann, Daniel S. J., 2013. "Can working conditions explain the return-to-entrepreneurship puzzle?," Discussion Papers 86, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  5. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.

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