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CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology KTH/CESIS Working Paper Series in Economics and Institutions of Innovation

No 345:
Education and Self-employment Propensity

Johan Klaesson () and Johan P Larsson ()

Abstract: We examine the relationship between entrepreneurship and education length and field. Entrepreneurship and education are both used as policy vehicles for achieving employment and economic growth, regionally and nationally. If entrepreneurship in the form of new firms is the objective, then how will more education influence its achievability? We examine this question at the individual level using a full population data-set, and analyze the influence of education length and field on the propensity of leaving employment in 2007 for self-employment in 2008. The fields of education we investigate is: education, humanities and arts, social sciences, business and law and science. The effect of education on the probability of an individual turning from wage-employment into self-employment is positive overall, but differs considerably with respect to field of education on average and on the margin. The positive effects seem to almost exclusively come from the fields, science, social sciences and business and law. For the other fields the effect is essentially zero or even negative. In the empirics we control for a large set of variables controlling for individual, employer, and regional heterogeneity.

Keywords: Self-employment; Entry; Human capital; Education; Industry; Region; (follow links to similar papers)

JEL-Codes: C21; L26; R10; (follow links to similar papers)

26 pages, March 12, 2014

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