Do Entrepreneurs Really Earn Less?

30 Pages Posted: 19 Nov 2014

See all articles by Alina Sorgner

Alina Sorgner

University of Jena

Michael Fritsch

University of Jena - School of Economics and Business Administration

Alexander Kritikos

Europa-Universitaet Viadrina - Fakultat fur Wirtschaftswissenschaften; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2014

Abstract

Based on representative micro data for Germany, we compare the incomes of self-employed with those of wage workers. Our results show that the median self-employed entrepreneur with employees earns significantly more than the median salaried employee, while the median solo entrepreneur earns less. However, solo entrepreneurship pays for those with a university entrance degree but no further professional qualification as well as for those who were in the upper percentiles of the income distribution in their previous salaried job. Surprisingly, the variation in hourly incomes of solo entrepreneurs is higher than that of entrepreneurs with employees.

Keywords: Income, entrepreneurship, self-employment, start-ups, Germany

JEL Classification: L26, D22

Suggested Citation

Sorgner, Alina and Fritsch, Michael and Kritikos, Alexander S., Do Entrepreneurs Really Earn Less? (November 2014). DIW Berlin Discussion Paper No. 1425, Available at SSRN: https://ssrn.com/abstract=2526820 or http://dx.doi.org/10.2139/ssrn.2526820

Alina Sorgner

University of Jena ( email )

F├╝rstengraben 1
Jena, 07743
Germany

Michael Fritsch

University of Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

Alexander S. Kritikos (Contact Author)

Europa-Universitaet Viadrina - Fakultat fur Wirtschaftswissenschaften ( email )

15230 Frankfurt (Oder)
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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