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

Year: 2020

Type: article

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.

Source: Labour Economics

DOI: 10.1016/j.labeco.2020.101933

Authors: Claudio Michelacci, Fabiano Schivardi

Institutions: Einaudi Institute for Economics and Finance, Libera Università Internazionale degli Studi Sociali Guido Carli

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities, Quality education, No poverty

Open Access status: hybrid

Estimated APC paid: $1,900