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Author: van der Sluis, Justin
Resulting in 6 citations.
1. Hartog, Joop
van Praag, C. Mirjam
van der Sluis, Justin
If You Are So Smart, Why Aren't You an Entrepreneur? Returns to Cognitive and Social Ability: Entrepreneurs Versus Employees
Journal of Economics and Management Strategy 19,4 (Winter 2010): 947-989.
Also: https://onlinelibrary.wiley.com/doi/10.1111/j.1530-9134.2010.00274.x
Cohort(s): NLSY79
Publisher: Wiley Online
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Earnings; Entrepreneurship; Noncognitive Skills

Permission to reprint the abstract has not been received from the publisher.

How valuable are cognitive and social abilities for entrepreneurs' relative to employees' earnings? We answer three questions: (1) To what extent does a composite measure of ability affect an entrepreneur's earnings relative to wages earned by employees? (2) Do different cognitive abilities (e.g., math ability, language, or verbal ability) and social ability affect earnings of entrepreneurs and employees differently?, and (3) Does the balance in these measured ability levels affect an individual's earnings? Our (difference-of-difference) estimates of the returns to ability for spells in entrepreneurship versus wage employment account for selectivity into entrepreneurial positions insofar as they are determined by fixed individual characteristics. Our robust results provide the following answers to the three questions: General ability has a stronger impact on entrepreneurial incomes than on wages. Moreover, entrepreneurs and employees benefit from different sets of specific abilities: verbal and clerical abilities have a stronger impact on wages, whereas mathematical, social, and technical ability are more valuable for entrepreneurs. The balance in the various kinds of ability also generates a higher income, but only for entrepreneurs: This finding supports Lazear's Jack-of-all-Trades theory.
Bibliography Citation
Hartog, Joop, C. Mirjam van Praag and Justin van der Sluis. "If You Are So Smart, Why Aren't You an Entrepreneur? Returns to Cognitive and Social Ability: Entrepreneurs Versus Employees." Journal of Economics and Management Strategy 19,4 (Winter 2010): 947-989.
2. van der Sluis, Justin
Successful Entrepreneurship and Human Capital
Ph.D. Dissertation No. 402, Tinbergen Institute Research Series, April 2007. ISBN 978 90 5170 734 2.
Also: http://dare.uva.nl/document/46786
Cohort(s): NLSY79
Publisher: Tinbergen Institute
Keyword(s): Census of Population; Earnings; Educational Returns; Entrepreneurship; Income; Locus of Control (see Rotter Scale); Rotter Scale (see Locus of Control); Self-Employed Workers; Variables, Instrumental

Permission to reprint the abstract has not been received from the publisher.

We estimate the effect of education on incomes for both entrepreneurs and employees on a sample drawn from the National Longitudinal Survey of Youth (NLSY) in the USA. The nationally representative part of the NLSY consists of 6,111 individuals aged between 14 and 22 years in 1979.4 They have been interviewed annually up to 1994, and since then on a bi-annual basis. Our analysis is based on 19 waves, where the first interviews were held in 1979, and the last in the year 2000. Within each observed year, the sample includes all persons who are entrepreneurs or employees (defined below), while excluding students and people who are unemployed or otherwise not working. The resulting sample size per year includes, on average, 2,646 entrepreneurs/employees. On average, each individual is included in the sample in 12.8 waves. Before turning to the descriptive statistics, we first define the three endogenous variables empirically -- i.e., entrepreneur/employee, education and income -- and mention three appealing features of the dataset.

An entrepreneur is defined as a person whose main occupation in the labor market is on a self-employed basis or who is the owner-director of an incorporated business. Farmers are excluded from the sample.5 Furthermore, we exclude \hobby" entrepreneurs from the sample by using a lower boundary of 300 hours per year worked as an entrepreneur. An employee is defined as a person whose main occupation is a salaried job. The education level of both groups is measured in years of completed schooling, with a maximum of 20.

Bibliography Citation
van der Sluis, Justin. Successful Entrepreneurship and Human Capital. Ph.D. Dissertation No. 402, Tinbergen Institute Research Series, April 2007. ISBN 978 90 5170 734 2..
3. van der Sluis, Justin
van Praag, C. Mirjam
Economic Returns to Education for Entrepreneurs: The Development of a Neglected Child in the Family of Economics of Education?
Swedish Economic Policy Review 11,2 (2004): 183-226.
Also: http://www.sweden.gov.se/content/1/c6/09/52/74/1c811916.pdf
Cohort(s): NLS General, NLSY79
Publisher: Swedish Economic Policy Review
Keyword(s): Educational Returns; Entrepreneurship; Human Capital; Locus of Control (see Rotter Scale); Rotter Scale (see Locus of Control); Self-Employed Workers; Variables, Instrumental

Permission to reprint the abstract has not been received from the publisher.

Entrepreneurship is becoming an increasingly prominent issue in both academic and policy circles. Entrepreneurs are often credited with innovating new products, discovering new markets, and displacing ageing incumbents in a process of "creative destruction". But it is also recognized that if entrepreneurs face constraints such as limited human capital, then these economic benefits might not be realized. This realization has prompted several governments to devise public programs to encourage entrepreneurship. Underlying most of these programs is a belief that human capital affects entrepreneurs' performance in practice. The measurement of the (determinants of the) return to entrepreneurial (human) capital is thus relevant for devising (government and lenders') programs to realize the optimal economic benefits from entrepreneurship. These are often larger than the private benefits accruing to entrepreneurs.

However, as we demonstrate in this paper, the effect of formal schooling, one of the most prominent manifestations of human capital, on entrepreneur performance has not yet been consistently measured, due to shortcomings in the empirical strategies applied so far. We discuss these shortcomings as well as some potential solutions that we borrow from the technically more sophisticated literature on the returns to education for employees. Then, we will discuss two recent applications of such more advanced empirical strategies to consistently estimate the causal and distinct effect of formal education on entrepreneurial income. The first study, by Van der Sluis, Van Praag and Van Witteloostuijn (2004) (VVW hereafter) pertains to the US. It compares the rate of return to education for entrepreneurs to the rate of return for employees. The second study, by Parker and Van Praag (2004) (PvP hereafter) pertains to Europe (The Netherlands). It isolates the causal effect of education from the inter-related effect of capital constraints on the entrepreneur's perf ormance. The final sections of this paper will discuss the results from those recent studies, and provide conclusions and policy implications.

Bibliography Citation
van der Sluis, Justin and C. Mirjam van Praag. "Economic Returns to Education for Entrepreneurs: The Development of a Neglected Child in the Family of Economics of Education?" Swedish Economic Policy Review 11,2 (2004): 183-226.
4. van der Sluis, Justin
van Praag, C. Mirjam
van Witteloostuijn, A.
Why Are the Returns to Education Higher for Entrepreneurs Than for Employees?
Working Paper, Faculty of Economics and Business, University of Amsterdam, January 2006.
Also: http://www1.fee.uva.nl/pp/bin/408fulltext.pdf
Cohort(s): NLSY79
Publisher: Faculty of Economics and Business, University of Amsterdam
Keyword(s): Earnings; Educational Returns; Entrepreneurship; Income; Locus of Control (see Rotter Scale); Rotter Scale (see Locus of Control); Self-Employed Workers; Variables, Instrumental

Permission to reprint the abstract has not been received from the publisher.

We compare the returns to education (RTE) for entrepreneurs and employees, based on 19 waves of the NLSY database. By using instrumental variable techniques (IV) and taking account of selectivity, we find that the RTE are significantly higher for entrepreneurs than for employees (18.3 percent and 9.9 percent, respectively). We perform various analyses in an attempt to explain the difference. We find (indirect) support for the argument that the higher RTE for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education.
Bibliography Citation
van der Sluis, Justin, C. Mirjam van Praag and A. van Witteloostuijn. "Why Are the Returns to Education Higher for Entrepreneurs Than for Employees?." Working Paper, Faculty of Economics and Business, University of Amsterdam, January 2006.
5. van der Sluis, Justin
van Praag, C. Mirjam
van Witteloostuijn, A.
Why Are the Returns to Education Higher for Entrepreneurs than for Employees?
IZA DP No. 3058, Institute for the Study of Labor, September 2007.
Also: ftp://repec.iza.org/RePEc/Discussionpaper/dp3058.pdf
Cohort(s): NLSY79
Publisher: Institute for the Study of Labor (IZA)
Keyword(s): Earnings; Educational Returns; Entrepreneurship; Income; Locus of Control (see Rotter Scale); Rotter Scale (see Locus of Control); Self-Employed Workers; Variables, Instrumental

Permission to reprint the abstract has not been received from the publisher.

We compare the returns to education (RTE) for entrepreneurs and employees, based on 19 waves of the NLSY database. By using instrumental variable techniques (IV) and taking account of selectivity, we find that the RTE are significantly higher for entrepreneurs than for employees (14 per cent and 10 per cent, respectively). We perform various analyses in an attempt to explain the difference. We find (indirect) support for the argument that the higher RTE for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education.
Bibliography Citation
van der Sluis, Justin, C. Mirjam van Praag and A. van Witteloostuijn. "Why Are the Returns to Education Higher for Entrepreneurs than for Employees?." IZA DP No. 3058, Institute for the Study of Labor, September 2007.
6. van Praag, Mirjam
van Witteloostuijn, Arjen
van der Sluis, Justin
The Higher Returns to Formal Education for Entrepreneurs versus Employees
Small Business Economics 40,2 (February 2013): 375-396.
Also: http://link.springer.com/article/10.1007/s11187-012-9443-y
Cohort(s): NLSY79
Publisher: Springer
Keyword(s): Education; Educational Returns; Employment; Entrepreneurship; Income

Permission to reprint the abstract has not been received from the publisher.

How valuable is formal education for entrepreneurs’ income relative to employees’? And if the income returns to formal education are different for entrepreneurs vis-à-vis employees, what might be a plausible explanation? To explore these questions, we analyze a large representative US panel. We show that entrepreneurs have higher returns to formal education than employees. We refer to this as the entrepreneurship returns puzzle. We run post hoc analyses to explore a number of potential explanations of this puzzle. Indirectly, our analysis indicates that the higher returns to formal education for entrepreneurs might be due to the fewer organizational constraints they face, leading to more personal control over how to use their human capital, compared to employees.
Bibliography Citation
van Praag, Mirjam, Arjen van Witteloostuijn and Justin van der Sluis. "The Higher Returns to Formal Education for Entrepreneurs versus Employees ." Small Business Economics 40,2 (February 2013): 375-396.