| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 10493910 | Journal of Business Venturing | 2014 | 18 Pages |
Abstract
A review of recent evidence on relative earnings from entrepreneurship versus wage work presents a puzzle: why do individuals become entrepreneurs when entrepreneurs on average apparently earn less than employees? After considering several potential explanations, we empirically analyze one: income underreporting by entrepreneurs. Using a nationwide panel survey representing U.S. households over 15Â years, we estimate that entrepreneurs on average earn 4% less per year than employees. However, after correcting for income underreporting, the mean financial gain to entrepreneurship is positive and large, greater than 42%. However, we show that this estimate is built on some unpalatable model assumptions.
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Business, Management and Accounting
Business and International Management
Authors
Thomas Ã
stebro, Jing Chen,