Working Paper Series
Does College Education Reduce Small Business Failure?
() and Tino Sanandaji
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
fi…nd no effect of college education on business failure. College however
signi…cantly 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-con…dence; (follow links to similar papers)
JEL-Codes: C41; J24; L26; (follow links to similar papers)
36 pages, December 17, 2014
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