The name is absent

ess pro,.table is entrepreneurship relatively to becoming a worker. B ecause
ofthe hypothesis according to which progenitors’ entrepreneurial technical
ire¢ ciency is Uniformydistributed on (0; 1), theperaentαgecfncn-cμaii...ed
progenitors who decide to become entrepreneurs is v_en_q. Ecuivarlently the
peιτentαgecfncn-c∣uali...edprcgenito∣∙s beccmingworkers is 1 ∣ P_e;_nq:

A nalogously, it is easy to demonstrate that a cuali.ed agent.nds it
pro.table to become entrepreneur if and only if he is characterized by a

degree cfinetdency owerorecuial to the cu∣ali...ed threshold level v_eq =
_                          > 0 ∙ °>e;q ∙ 1 for    . h ∙ qK ∙ i^x+w⁺±^h      ’

^qK⁽¹⁺h)-ⁱx-(^w+±^h) ; with   p_e;q = 1 forqK> ^{iχ + w}+±^h            ^     .

q^K            > °_eq = 0 for qK < ^ix+W+±^h

^e;^q             ɪ           1+ h

A Isointhiscasethethreshold evelcfinetdencyisadecreasingfUincticn
ofthe interest rate and ofthe input recuirement, while it is an increasing
fUncticn cf the di^π erence between the gross return from education fOrentre-
preneurs qKh amdthegross return from education forwcrkers (±h).

T he cu∣ali...ed threshold degree of inetciency is higher than the non-
cuali.ed threshold level. A ctually, ifan individualis non-cuali.ed, he be-
ccmes entrepreneurifhis degreeofinet ciency is Cwerthan P_e;_nq ; education
implies an increaseinwageecual tctheco>legepremium ±h; whichwculd de-
crease entrepreneurialpro.tability. A nyway education increases also pro.t,
and the pro..tenhancementqKh is Cjreateirthan wage enhancement ±h. In
otherwords thegross return from human capitalinvestmentis higherforen-
trepreneurs than fcrwcrkers. T Hhenete^a ectcfeducaticn is thereforeahigher
pro.tability ofundertaking the entrepreneurial investment. T he threshold
degree ofinet ciency is therefore higherfCreducated agents. Fcrmaily

A pcoragents whccannctap ord human capital investmentmay...nd itprof-
itable tcundertake the investmentprcject, buthe has tcbe naturally mcre
et cientthan a rich/c∣uali...ed agent.

Sinceweailth and technical inetciency a∣restcohastica∣ly independent;
the percentage cfcu∣aii...ed workers among progenitors is (1 i h) P_e;q: N on-
c∣uali...ed entrepreneurs are instead the h°_e;_nq percent.  T he percentage of

c∣uali...ed workers is (1 i h)(1 i P_e;_q) and ...naly ncn-cu∣alι...ecl workers are
the h (1 i P_e;_nq) percentofprogenitcrs.

<<   7   8   9   10   11   12   13   >>

More intriguing information