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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 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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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30076.

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Date of creation: Mar 2011
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Handle: RePEc:pra:mprapa:30076

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Related research

Keywords: entrepreneurship; earnings; twin data; education; monetary returns; nonmonetary returns; selection;

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References

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Citations

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Cited by:
  1. Bockerman, Petri & Vainiomäki, Jari, 2012. "Stature and life-time labor market outcomes: Accounting for unobserved differences," MPRA Paper 42220, University Library of Munich, Germany.
  2. 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.
  3. 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).
  4. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.
  5. 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.

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