DP12312 Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs

Author(s):	Claudio Michelacci, Fabiano Schivardi
Publication Date:	September 2017
Date Revised:	January 2019
Keyword(s):	entrepreneurship, skill premium
JEL(s):	J24, J31, M13
Programme Areas:	Labour Economics, Industrial Organization
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=12312

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 experience.