Whereas there is an abundant literature on the impact of an additional year of schooling on wages or salaries of
employees, the relationship between entrepreneurship and schooling has received much less attention, and much less
sophisticated econometric treatment. Therefore, in this section, I simply focus on results in the literature on the proportion
of entrepreneurs by educational attainment. In Section 5, I supplement this with further, new evidence from the NLSY79.
In that section, I also go beyond the focus on schooling in much of the entrepreneurship literature and consider another,
potentially more informative proxy for ability: wages in previous employment. Results from the NLSY79 are generally in
line with the ones from other countries and data sources reported in this section.
Before proceeding to the results, note that studies that look only for a linear effect, e.g. by regressing the probability of
being an entrepreneur on years of schooling, often remain inconclusive. The reason for this is that on closer inspection, as
shown below, a U-shape appears: people at the extremes of the education distribution are more likely to be entrepreneurs than people with intermediate level