Abstract
This paper provides an analytical review of empirical studies into the impact of schooling on entrepreneurship selection and performance in less developed countries. We analyze the variation of this impact across various characteristics of studies. We find that a marginal year of schooling raises enterprise income by an average of 5.5 percent, which is closely similar to the average return in industrial countries. The return varies by gender, rural/urban residence, and the share of agriculture in the economy. Furthermore, more educated workers typically end up in wage employment but also prefer non-farm entrepreneurship to farming. The education effect that separates workers from self-employment into 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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