Entrepreneurial School Dropouts: A Model on Signalling, Education and Entrepreneurship
I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population.
|Date of creation:||02 Apr 2012|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
References listed on IDEAS
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.:
- Black, Sandra & Devereux, Paul J. & Salvanes, Kjell G, 2007.
"Small Family, Smart Family? Family Size and the IQ Scores of Young Men,"
CEPR Discussion Papers
6443, C.E.P.R. Discussion Papers.
- Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2010. "Small Family, Smart Family? Family Size and the IQ Scores of Young Men," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
- Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2007. "Small Family, Smart Family? Family Size and the IQ Scores of Young Men," NBER Working Papers 13336, National Bureau of Economic Research, Inc.
- Black, Sandra E. & Devereux, Paul J. & Salvanes, Kjell G., 2007. "Small Family, Smart Family? Family Size and the IQ Scores of Young Men," IZA Discussion Papers 3011, Institute for the Study of Labor (IZA).
- Paul J. Devereux & Sandra E. Black & Kjell G. Salvanes, 2007. "Small family, smart family? Family size and the IQ scores of young men," Open Access publications 10197/739, School of Economics, University College Dublin.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
- Tamas Bartus, 2004. "MARGEFF: Stata module to compute average marginal effects for categorical and limited dependent variable models," Statistical Software Components S445001, Boston College Department of Economics, revised 04 Sep 2009.
- In-Koo Cho & David M. Kreps, 1987.
"Signaling Games and Stable Equilibria,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 102(2), pages 179-221.
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
- Headen, Alvin E, Jr, 1990. "Wage, Returns to Ownership, and Fee Responses to Physician Supply," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 30-37, February.
When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2012_010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Magnus Gabriel Aase)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.