Is Entrepreneurship Skill Biased? An Empirical Analysis with Panel Data for the Western World (1980-2006)

Abstract

In the present paper it will be pointed out that although entrepreneurship reduces total economy’s unemployment rate, it is skill biased. This is feasible by the introduction of a formula to estimate the entrepreneurial reward. At first, an effort will be made to estimate numerically the effect of entrepreneurial caliber on total economy’s unemployment reduction. It will be thus shown that in the western world entrepreneurial reward reduces unemployment as a whole. Panel data are used for the period 1980-2006. Second, it will be claimed with panel data that during the period 1992- 2006 in the Western world entrepreneurship does not reduce low-skill unemployment rate, but only unemployment rates of higher skills. The elaboration of all data is made feasible through the Eviews software package.