Entrepreneurial school dropouts: A model on signalling, education and entrepreneurship

Arbeitspapier

I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Memorandum ; No. 10/2012

Classification and Topics

• Classification: Wirtschaft ; Entrepreneurship ; New Firms; Startups ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: Entrepreneurship ; self-employment ; education ; ability ; Unternehmensgründung ; Unternehmer ; Bildungsverhalten ; Humankapital ; Signalling ; Norwegen

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Skogstrøm, Jens Fredrik Baumgarten
• Event: Veröffentlichung
• (who): University of Oslo, Department of Economics
• (where): Oslo
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/90782
• Last update: 10.03.2025, 11:45 AM CET