Are Education and Entrepreneurial Income Endogenous? A Bayesian Analysis
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Joern H. Block
Abstract
Education is a well-known driver of (entrepreneurial) income. The measurement of its influence, however, suffers from endogeneity suspicion. For instance, ability and occupational choice are mentioned as driving both the level of (entrepreneurial) income and of education. Using instru-mental variables can provide a way out. However, two questions remain: whether endogeneity is really present and whether it matters for the size of the estimated relationship. Using Bayesian methods, we find that the relationship between education and entrepreneurial income is indeed en-dogenous and that the impact of endogeneity on the estimated relationship between education and income is sizeable. Implications of our findings for research and practice are discussed.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Editors' Corner
- What Did Stinchcombe Really Mean? Designing Research to Test the Liability of Newness among New Ventures
- Competitive Research Article
- Are Education and Entrepreneurial Income Endogenous? A Bayesian Analysis
- The Effects of New Ventures' Resource Strategies on Angels' Investing Outcomes: Big Gains and Big Losses in Angel Investments
- The Social Dimension of Entrepreneurship: the Role of Regional Social Effects
Articles in the same Issue
- Editors' Corner
- What Did Stinchcombe Really Mean? Designing Research to Test the Liability of Newness among New Ventures
- Competitive Research Article
- Are Education and Entrepreneurial Income Endogenous? A Bayesian Analysis
- The Effects of New Ventures' Resource Strategies on Angels' Investing Outcomes: Big Gains and Big Losses in Angel Investments
- The Social Dimension of Entrepreneurship: the Role of Regional Social Effects
