What Is Left to Residual Claimants? The Empirics of Income Reported by Entrepreneurs and Workers

Poutvaara, Panu; Tuomala, Juha (2004): What Is Left to Residual Claimants? The Empirics of Income Reported by Entrepreneurs and Workers. IZA Discussion Papers / Forschungsinstitut für Zukunft und Arbeit, Bonn, 1178

Abstract

Using Finnish panel data, we study how entrepreneurs differ from workers in education and income dynamics. We find that workers have higher median income in all educational groups. Without additional controls, entrepreneurs have higher average income with all but undergraduate level of education. However, random effects and matching models suggest that entrepreneurs have lower incomes. We also analyze those who changed careers. Those with higher level of education are more likely to switch from entrepreneurship to workers, while education does not explain, in a statistically significant level, switching from being worker to entrepreneurship.

• Item Type: Paper (Discussion Paper)
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for International Institutional Comparisons
• Subjects: 300 Social sciences > 330 Economics
• Language: English