Performance of education in micro-entrepreneurs: Returns by educational level in the Valparaíso region, Chile

Abstract

Education and entrepreneurship are considered fundamental drivers for the development of a society. This study aims to analyze the profitability of education within the entrepreneurial sector. Data from entrepreneurs who benefited from a government program in 2016 in the Valparaíso region were employed. The dataset comprises 1,554 responses, including socioeconomic information. A descriptive statistical analysis was conducted, and an econometric model was estimated using Mincer’s earnings equation. The analysis reveals that most entrepreneurs have secondary education, but income increases with higher educational levels. Entrepreneurs with higher education earn significantly more, underscoring the importance of higher education for economic success. Income tends to be higher in the age groups of 30-39 and 50-59 years and decreases after 60. The Mincer model shows that each additional year of education is associated with a 2% increase in monthly income, while each additional year of work experience increases income by 1.2%. Similarly, completing higher education is associated with a 45.7% increase in monthly income and a 34.6% increase in hourly income. This research provides evidence for implementing public policies aimed at enhancing entrepreneurial education, thereby promoting inclusive and sustainable economic development in the region.