Scandinavian Working Papers in Economics

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

No 345: Education and Self-employment Propensity

Johan Klaesson () and Johan P Larsson ()
Additional contact information
Johan Klaesson: Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School (JIBS) and Centre of Excellence in Science and Innovation Studies (CESIS), Postal: P.O. Box 1026, , 551 11 Jönköping, , Sweden
Johan P Larsson: Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School (JIBS) and Centre of Excellence in Science and Innovation Studies (CESIS), Postal: P.O. Box 1026, , 551 11 Jönköping, , Sweden

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

JEL-codes: C21; L26; R10

26 pages, March 12, 2014

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