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Finance and Economics Discussion Series
The Finance and Economics Discussion Series logo links to FEDS home page Risk, Entrepreneurship, and Human Capital Accumulation
Murat F. Iyigun and Ann L. Owen

Abstract: Entrepreneurial human capital plays a relatively more important role in intermediate income countries, but professional human capital is relatively more abundant in richer economies. Because the return to entrepreneurship is risky, individuals devote less time to the accumulation of entrepreneurial skills and more to the accumulation of professional skills as per capita income grows. Countries that initially have too little of either entrepreneurial or professional skills may end up in a development trap. The steady state may be characterized by either too much or too little education.

Keywords: Human capital, occupational choice, education, entrepreneurship, growth

Full paper (998 KB PDF)

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Last update: September 17, 1997