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The World Bank Economic Review Advance Access published online on September 28, 2005
The World Bank Economic Review, doi:10.1093/wber/lhi013
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© The Author 2005. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development/THE WORLD BANK. All rights reserved. For permissions, please e-mail: journals.permissions@oupjournals.org.

Article

Entrepreneurship Selection and Performance: A Meta-Analysis of the Impact of Education in Developing Economies

Justin van der Sluis 1*, Mirjam van Praag 2*, and Wim Vijverberg 3*

1 Student at the University of Amsterdam and the Tinbergen Institute
2 Professor of entrepreneurship at the University of Amsterdam and research fellow at the Tinbergen Institute
3 Professor of economics and political economy at the University of Texas, Dallas, and research fellow at the Institute for the Study of Labor (IZA)

* To whom correspondence should be addressed.
Justin van der Sluis, E-mail: j.vandersluis{at}uva.nl
Mirjam van Praag, E-mail: c.m.vanpraag{at}uva.nl
Wim Vijverberg, E-mail: vijver{at}utdallas.edu


  Abstract

This meta-analytical review of empirical studies of the impact of schooling on entrepreneurship selection and performance in developing economies looks at variations in impact across specific characteristics of the studies. A marginal year of schooling in developing economies raises enterprise income by an average of 5.5 percent, which is close to the average return in industrial countries. The return varies, however, by gender, rural or urban residence, and the share of agriculture in the economy. Furthermore, more educated workers typically end up in wage employment and prefer nonfarm entrepreneurship to farming. The education effect that separates workers into self-employment and wage employment is stronger for women, possibly stronger in urban areas, and also stronger in the least developed economies, where agriculture is more dominant and literacy rates are lower.


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