The Return-to-Entrepreneurship Puzzle

37 Pages Posted: 21 Jun 2011

See all articles by Ari Hyytinen

Ari Hyytinen

University of Jyväskylä

Pekka Ilmakunnas

Aalto University School of Business

Otto Toivanen

Aalto University - Department of Economics; KU Leuven - Faculty of Business and Economics (FBE); CEPR; Helsinki Center of Economic Research (HECER)

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Date Written: March 24, 2011

Abstract

The returns to entrepreneurship are monetary and non-monetary. We offer new evidence on these returns using a large sample of genetically identical male twins.

Our within-twin analysis suggests that OLS estimates are downwards, and traditional first-differenced panel data estimates upwards biased. We find no differences in the earnings of men with either low or high education. Our within-twin analysis of non-monetary returns shows that entrepreneurs with low education work longer hours and have greater responsibilities, but also face a reduced risk of divorce and less monotonous work tasks. The same does not apply to highly educated entrepreneurs.

Keywords: Dynamics, entrepreneurship, earnings, twin data, education, monetary returns, non-monetary returns, selection

JEL Classification: L26, J24

Suggested Citation

Hyytinen, Ari and Ilmakunnas, Pekka and Toivanen, Otto, The Return-to-Entrepreneurship Puzzle (March 24, 2011). Available at SSRN: https://ssrn.com/abstract=1868790 or http://dx.doi.org/10.2139/ssrn.1868790

Ari Hyytinen (Contact Author)

University of Jyväskylä ( email )

PO Box 35
Jyväskylä, 40014
Finland

HOME PAGE: http://www.jyu.fi

Pekka Ilmakunnas

Aalto University School of Business ( email )

PO Box 21240
FI-00076 Aalto, Helsinki
Finland
+358 40 5815390 (Phone)

Otto Toivanen

Aalto University - Department of Economics ( email )

PO Box 1210
FI-00101 Helsinki
Finland

KU Leuven - Faculty of Business and Economics (FBE) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

CEPR ( email )

London
United Kingdom

Helsinki Center of Economic Research (HECER)

FI-00014 Helsinki
Finland

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