Using an extensive panel of 350,000 individuals over 12 years, we
estimate earnings functions for workers and entrepreneurs in Finland.
When controlling for the level of education, entrepreneurs usually have
lower median income but higher average income. Earnings equations
explain a considerably smaller share of variation of income for entrepreneurs.
Surprisingly, entrepreneurs with high school or vocational
education earn less than entrepreneurs with only basic education or
less, while average earnings for workers increase in the level of education.
We conclude with tentative policy implications concerning
education policy and entrepreneurship.