Education and earnings in Peru's informal nonfarm family enterprises

This study presents an analysis of non-farm family businesses in Peru. It uses the enterprise rather than the individual as the unit of analysis, and incorporates enterprise characteristics (capital, nonlabor inputs, focus of operation) explicitly. The central question addressed is: does formal schooling make a difference? Women and children are included in the analysis since thay play an important, if not the preeminent, role in Peru's family business sector. We can thus see whether the payoff to education differs between male and female entrepreneurs after controlling for other factors. The paper proceeds as follows. After the introduction, sections 2 and 3 describe, respectively, the data and the regression model. Section 4 presents the empirical results. Section 5 assesses these results, including those for nonschooling variables, and section 6 discusses the implications with regard to education, comparing our findings with those obtained for some of the same people, considered as individuals, in other analysis.