Who Earns more: Job Creators, Solo-Entrepreneurs or Employees Empirical evidence from Visegrad Countries.

Abstract

One of the most important questions of individuals pursuing entrepreneurship as a career choice is, do entrepreneurs earn more, compared to employees? We aim to contribute to this research by comparing earnings of employees, solo-self-employed and self-employed with employees. We utilise data from the two waves of the European Survey on Working Conditions (2010, 2015) and we focus on Visegrad countries (Czech Republic, Hungary, Poland and Slovakia). The analysis is based on OLS approach and nearest neighbour matching approach. Controlling for key individual characteristics, we find positive returns to entrepreneurship. However, we show that the OLS approach over-estimates the size of returns to entrepreneurship, compared to matching approach. We find that self-employed without employees earn on average 6.7% more when compared to employees, and to self-employed with employees even on average 22% more than employees. We also find that job creators earn on average 22% more when compared with solo-self-employed.

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