Returns to education and experience in self-employment: Evidence from Germany
AbstractThis paper compares the returns to human capital in the self-employed and wage-employed sectors of the economy. Using data from the former West German sample of the German Socioeconomic Panel survey for the 1984-1997 time period, we estimate returns to education and work experience from standard log-earnings equations for self-employed and wage-employed workers. Two key results are found. First, additional schooling has a smaller effect on earnings for the self-employed than for the wage-employed. Indeed, educational attainment has an insignificant effect on self-employment earnings. Second, prior self-employment experience receives a lower return in wage-employment than does prior wage-employment experience. These results are consistent across specifications controlling for education endogeneity and self-selection bias.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by IRISS at CEPS/INSTEAD in its series IRISS Working Paper Series with number 2002-04.
Date of creation: Dec 2002
Date of revision:
Contact details of provider:
Postal: 3, avenue de la Fonte, L-4364 Esch-sur-Alzette, G.-D. Luxembourg
Phone: 00352 / 58 58 55 - 1
Fax: 00352 / 58 58 55 - 700
Web page: http://iriss.ceps.lu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Trostel, Philip & Walker, Ian & Woolley, Paul, 2002. "Estimates of the economic return to schooling for 28 countries," Labour Economics, Elsevier, vol. 9(1), pages 1-16, February.
- David G. Blanchflower, 2000.
"Self-Employment in OECD Countries,"
NBER Working Papers
7486, National Bureau of Economic Research, Inc.
- Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
- Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 757-793.
- Williams, Donald R., 2000. "Consequences of self-employment for women and men in the United States," Labour Economics, Elsevier, vol. 7(5), pages 665-687, September.
- Blanchflower, David G & Meyer, Bruce D, 1994. " A Longitudinal Analysis of the Young Self-Employed in Australia and the United States," Small Business Economics, Springer, vol. 6(1), pages 1-19, February.
- Clain, Suzanne Heller, 2000. "Gender differences in full-time self-employment," Journal of Economics and Business, Elsevier, vol. 52(6), pages 499-513.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- Lechner, Michael, 1995. "Some Specification Tests for Probit Models Estimated on Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(4), pages 475-88, October.
- Trostel, P. & Walker, I., 2000.
"Education and Work,"
The Warwick Economics Research Paper Series (TWERPS)
554, University of Warwick, Department of Economics.
- Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
- Parker, Simon C., 2005.
"Entrepreneurship Among Married Couples in the United States: A Simultaneous Probit Approach,"
IZA Discussion Papers
1712, Institute for the Study of Labor (IZA).
- Parker, Simon C., 2008. "Entrepreneurship among married couples in the United States: A simultaneous probit approach," Labour Economics, Elsevier, vol. 15(3), pages 459-481, June.
- Lechmann, Daniel S. J. & Schnabel, Claus, 2012.
"What explains the gender earnings gap in self-employment? A decomposition analysis with German data,"
77, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Lechmann, Daniel S. J. & Schnabel, Claus, 2012. "What Explains the Gender Earnings Gap in Self-Employment? A Decomposition Analysis with German Data," IZA Discussion Papers 6435, Institute for the Study of Labor (IZA).
- Fossen, Frank M. & Büttner, Tobias J. M., 2012.
"The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees,"
2012/19, Free University Berlin, School of Business & Economics.
- Frank M. Fossen & Tobias J. M. Büttner, 2012. "The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees," Discussion Papers of DIW Berlin 1241, DIW Berlin, German Institute for Economic Research.
- Fossen, Frank M. & Büttner, Tobias J. M., 2012. "The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees," IZA Discussion Papers 6819, Institute for the Study of Labor (IZA).
- Frank M. Fossen & Tobias J. M. Büttner, 2012. "The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees," SOEPpapers on Multidisciplinary Panel Data Research 482, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Kaiser, Ulrich & Malchow-Møller, Nikolaj, 2011. "Is self-employment really a bad experience?: The effects of previous self-employment on subsequent wage-employment wages," Journal of Business Venturing, Elsevier, vol. 26(5), pages 572-588, September.
- Johannes Martin, 2013. "The Impact on Earnings when Entering Self-Employment: Evidence for Germany," SOEPpapers on Multidisciplinary Panel Data Research 537, DIW Berlin, The German Socio-Economic Panel (SOEP).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Philippe Van Kerm).
If references are entirely missing, you can add them using this form.