Self-employed workers: Returns to education and training

Fredland, J. Eric; Little, Roger D.

doi:10.1016/0272-7757(81)90002-9

Cited by 31 publications

(13 citation statements)

References 6 publications

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“…The significant premium for entrepreneurs vis-à-vis employees on the payoff of an additional year of education is around 1.5%, on average, in the random effects framework, amounting to 2% in the fixed effects framework. The 1.5%-premium is in accordance with previously obtained results using OLS-estimation on US data (see, for instance, Fredland and Little, 1981;Tucker 1985Tucker , 1987Evans and Leighton, 1990;Robinson and Sexton, 1994). Adding general ability as a control to the regression does not decrease the premium for entrepreneurs (who also earn a premium on their general ability; see also Hartog et al, 2009), on the contrary.…”

Section: Panel B Ofsupporting

confidence: 91%

Returns for Entrepreneurs Versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees

2009

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Returns for entrepreneurs versus employees: the effect of education and personal control on the relative performance of entrepreneurs vis-à-vis wage employees van Praag, C.M.; van Witteloostuijn, A.; van der Sluis, J. Link to publication General rightsIt is not permitted to download or to forward/distribute the text or part of it without the consent of the author(s) and/or copyright holder(s), other than for strictly personal, individual use, unless the work is under an open content license (like Creative Commons). Disclaimer/Complaints regulationsIf you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library: http://uba.uva.nl/en/contact, or a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible. Returns for Entrepreneurs versus EmployeesThe effect of education and personal control on the relative performance of entrepreneurs vis-à-vis wage employees ABSTRACT How valuable is education for entrepreneurs' performance as compared to employees'? What might explain any differences? And does education affect peoples' occupational choices accordingly? We answer these questions based on a large panel of US labor force participants. We show that education affects peoples' decisions to become an entrepreneur negatively. We show furthermore that entrepreneurs have higher returns to education than employees (in terms of the comparable performance measure 'income'). This is the case even when estimating individual fixed effects of the differential returns to education for spells in entrepreneurship versus wage employment, thereby accounting for selectivity into entrepreneurial positions based on fixed individual characteristics. We find these results irrespective of whether we control for general ability and/or whether we use instrumental variables to cope with the endogenous nature of education in income equations. Finally, we find (indirect) support for the argument that the higher returns to education for entrepreneurs is due to fewer

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Section: Panel B Ofsupporting

confidence: 91%

Returns for Entrepreneurs Versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees

2009

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“…In accordance with previous studies using US data the returns are slightly higher for entrepreneurs (7.1%) than for employees (6.7%), though they are clearly of the same order of magnitude (Fredland and Little, 1981;Tucker, 1985Tucker, , 1987Evans and Leighton, 1990;Robinson and Sexton, 1994).…”

Section: Our Contributionssupporting

confidence: 77%

Human capital and entrepreneurs

Sluis¹,

Praag

2007

Human Capital

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“…Eric Friedland and Roger Little (1981) use National Longitudinal Survey data to explore the difference between the self-employed and salaried workers. At least in this sample, the self-employed have higher average educational achievement and incomes than salaried workers.…”

mentioning

confidence: 99%

Silver Signals: Twenty-Five Years of Screening and Signaling

Riley¹

2001

Journal of Economic Literature

573

351

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The theory of market signaling and screening is a cornerstone of the new economics of information. The last two and a half decades have not only witnessed a series of remarkable theoretical developments but also a wide range of applications. This essay examines the key theoretical issues and explores their use in three major fields: industrial organization, labor, and finance. Considerable emphasis is placed on attempts to test the theory in each of these fields.

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Self-employed workers: Returns to education and training

Cited by 31 publications

References 6 publications

Returns for Entrepreneurs Versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees

Returns for Entrepreneurs Versus Employees: The Effect of Education and Personal Control on the Relative Performance of Entrepreneurs vis-a-vis Wage Employees

Human capital and entrepreneurs

Silver Signals: Twenty-Five Years of Screening and Signaling

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