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Small Business Economics

, Volume 49, Issue 2, pp 251–272 | Cite as

Do entrepreneurs really earn less?

  • Alina Sorgner
  • Michael Fritsch
  • Alexander KritikosEmail author
Article

Abstract

Based on large representative German household survey data, we compare incomes of the self-employed with those of paid employees. We find that the entrepreneurial income gap is largest for those holding a tertiary degree, but in two directions: positive for employers (self-employed with further employees) and negative for solo entrepreneurs. Entrepreneurs holding a tertiary degree also face the greatest income variation. However, some solo self-employed earn more than their employed counterparts, in particular those with a university entrance degree as the highest level of education.

Keywords

Income Entrepreneurship Self-employment Germany 

JEL classification

L26 D22 D31 J24 J31 

Notes

Acknowledgements

We gratefully acknowledge the support of the Research Data Center of the German Statistical Offices of the Laender at the DIW Berlin. We are indebted to Thomas Åstebro, David Audretsch, Marco Caliendo, John Haltiwanger, Bruce Ross Larson, Adam Lederer, Simon Parker, and Utz Weitzel, and four anonymous referees for comments that helped us to substantially improve this paper.

Supplementary material

11187_2017_9874_MOESM1_ESM.docx (19 kb)
Table B1 (DOCX 19 kb)
11187_2017_9874_MOESM2_ESM.docx (19 kb)
Table B2 (DOCX 19 kb)
11187_2017_9874_MOESM3_ESM.docx (21 kb)
Table B3 (DOCX 20 kb)

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Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  • Alina Sorgner
    • 1
    • 2
  • Michael Fritsch
    • 1
    • 3
  • Alexander Kritikos
    • 3
    • 4
    • 5
    • 6
    Email author
  1. 1.School of Economics and Business AdministrationFriedrich Schiller University JenaJenaGermany
  2. 2.Kiel Institute for the World EconomyKielGermany
  3. 3.German Institute for Economic Research (DIW Berlin)BerlinGermany
  4. 4.University of PotsdamPotsdamGermany
  5. 5.IZABonnGermany
  6. 6.IABNurembergGermany

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