Does College Education Reduce Small Business Failure?

37 Pages Posted: 23 Dec 2014

See all articles by Andrea Asoni

Andrea Asoni

Research Institute of Industrial Economics (IFN)

Tino Sanandaji

Research Institute of Industrial Economics (IFN)

Date Written: November 30, 2014

Abstract

We estimate the effect of college education on business survival using the NLSY79. The endogeneity of both education and business ownership is accounted for by a competing risks duration model augmented with a college selection equation. Contrary to the previous literature, we find no effect of college education on business failure. College however significantly increases "employment survival". Unlike college, cognitive skills have a positive impact on employment survival for both the self-employed and employees. The results suggest that college affects the self-employed and salaried employees in different ways, for example generating skills more useful in employment than self-employment.

Keywords: Selection, Entrepreneurship, College Education, Intelligence, Self-confidence

JEL Classification: C41, J24, L26

Suggested Citation

Asoni, Andrea and Sanandaji, Tino, Does College Education Reduce Small Business Failure? (November 30, 2014). IFN Working Paper No. 1050, Available at SSRN: https://ssrn.com/abstract=2542170

Andrea Asoni

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Tino Sanandaji (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
0723230694 (Phone)

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