, Volume 34, Issue 1, pp 65-79,
Open Access This content is freely available online to anyone, anywhere at any time.

Entrepreneurship and welfare

Abstract

Here, I examine returns to entrepreneurship using a standard measure of welfare, the per-capita consumption expenditure. This analysis, using quantile regressions, reveals the existence of a welfare hierarchy in occupations. The results suggest that, across the welfare distribution, entrepreneurs who employ others have the highest returns in terms of consumption, while those entrepreneurs who work for themselves, that is, self-employed individuals, have slightly lower returns than the salaried employees. However, self-employment entails higher returns than casual labor and a relative escape from poverty.

Discussions with David Audretsch, Stephan Klasen, Wim Naude, and Christina Schneider have been very useful in the preparation of this manuscript. I am grateful to an anonymous referee, participants of the IZA-World Bank Conference on Employment and Development, the UNU-WIDER Workshop on Entrepreneurship and Economic Development, and faculty seminars at the University of Göttingen and Max Planck Institute for helpful comments.