Does Entrepreneurship Improve Economic Well-Being?

Vial, Virginie, Julien Hanoteau, and Frédéric Prévot (2012). "Does Entrepreneurship Improve Economic Well-Being?" Paper presented at the 9th annual conference of the HDCA, 5-7 September 2012, Jakarta, Indonesia.

We examine the consequences of entrepreneurship on the economic well-being of households in emerging economies, by and extending the measures of well-being from income, consumption, and assets to consider short- and long-term effects as well as market- and non–market-based aspects. It accounts for heterogeneity in returns to entrepreneurship for different population strata. We use a four-wave panel of 9, 519 households in Indonesia. Our results show that entrepreneurship is less income-rewarding than employment, except for the richest households. However, consumption returns are relatively higher for entrepreneurship, especially for the poorest households. For assets, the effect of entrepreneurship, relative to employment, is lower for the poorest households but higher for the richest.
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