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Are they all like Bill, Mark, and Steve? The education premium for entrepreneurs

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  • Michelacci, Claudio
  • Schivardi, Fabiano

Abstract

We calculate the average yearly income obtained by entrepreneurs during their venture using the Survey of Consumer Finances since the late 1980s. We find that the premium for postgraduate education has increased substantially more for entrepreneurs than for employees. Today an entrepreneur with a postgraduate degree earns on average $100,000 a year more than one with a college degree. The difference more than doubles at the higher quantiles of the income distribution. In the late 1980s, differences were close to zero. The rise in the postgraduate premium is mainly due to increased complementarity between higher education and past labor market experience.

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  • Michelacci, Claudio & Schivardi, Fabiano, 2020. "Are they all like Bill, Mark, and Steve? The education premium for entrepreneurs," Labour Economics, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:labeco:v:67:y:2020:i:c:s0927537120301378
    DOI: 10.1016/j.labeco.2020.101933
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    2. A. Baltrunaite & S. Formai & A. Linarello & S. Mocetti, 2024. "Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(3), pages 993-1027, November.
    3. Helu Jiang & Faisal Sohail, 2023. "Skill-Biased Entrepreneurial Decline," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 48, pages 18-44, April.
    4. Naijia Guo & Charles Ka Yui Leung, 2021. "Do elite colleges matter? The impact on entrepreneurship decisions and career dynamics," Quantitative Economics, Econometric Society, vol. 12(4), pages 1347-1397, November.
    5. Audinga Baltrunaite & Sara Formai & Andrea Linarello & Sauro Mocetti, 2022. "Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms," Questioni di Economia e Finanza (Occasional Papers) 678, Bank of Italy, Economic Research and International Relations Area.
    6. Anih Paul C. & Nissi Chicheta F. & Akpan Uduakobong E., 2019. "Real Estate Entrepreneurial Training and Education in Tertiary Institution: An Antidote to Unemployment," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 7(1), pages 172-189, January.
    7. McKenzie, David & Sansone, Dario, 2017. "Man vs. Machine in Predicting Successful Entrepreneurs: Evidence from a Business Plan Competition in Nigeria," CEPR Discussion Papers 12523, C.E.P.R. Discussion Papers.
    8. Sergio Salgado, 2019. "Technical Change and Entrepreneurship," 2019 Meeting Papers 634, Society for Economic Dynamics.

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    More about this item

    Keywords

    Skill premiums; Entrepreneurship;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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