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The return-to-entrepreneurship puzzle

Author

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  • Hyytinen, Ari
  • Ilmakunnas, Pekka
  • Toivanen, Otto

Abstract

The returns to entrepreneurship are monetary and non-monetary. We offer new evidence on these returns using a large sample of male twins. Our within-twin analysis suggests that OLS estimates are downwards, and panel data estimates upwards biased. The within-twin estimates imply that entrepreneurs earn a negative earnings premium. Our within-twin analysis of non-monetary returns shows that entrepreneurs work longer hours and have greater responsibilities, but also have a greater control over their work.

Suggested Citation

  • Hyytinen, Ari & Ilmakunnas, Pekka & Toivanen, Otto, 2013. "The return-to-entrepreneurship puzzle," Labour Economics, Elsevier, vol. 20(C), pages 57-67.
    • Handle: RePEc:eee:labeco:v:20:y:2013:i:c:p:57-67
    DOI: 10.1016/j.labeco.2012.11.002
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    More about this item

    Keywords

    Entrepreneurship; Earnings; Twin data; Monetary returns; Non-monetary returns; Selection;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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