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

72 Pages Posted: 26 Sep 2017 Last revised: 28 Jan 2019

See all articles by Claudio Michelacci

Claudio Michelacci

Einaudi Institute for Economics and Finance (EIEF)

Fabiano Schivardi

Luiss Guido Carli - Department of Economics and Finance; Einaudi Institute for Economics and Finance (EIEF); Centre for Economic Policy Research (CEPR)

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Date Written: September 2017

Abstract

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.

Keywords: entrepreneurship, skill premium

JEL Classification: J24, J31, M13

Suggested Citation

Michelacci, Claudio and Schivardi, Fabiano, Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs (September 2017). CEPR Discussion Paper No. DP12312, Available at SSRN: https://ssrn.com/abstract=3042623

Claudio Michelacci (Contact Author)

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

Fabiano Schivardi

Luiss Guido Carli - Department of Economics and Finance ( email )

Viale Romania 32
Rome, Rome 00187
Italy

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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