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Citation Information

Type Working Paper
Title Self-employment earnings: An empirical analysis of non-farm activities in rural Peru
Publication (Day/Month/Year) 2001
URL http://economics.ryerson.ca/research/paper25.pdf
I estimate the returns to education in household earnings that include self-employment ventures and I assess the role of local market development in affecting these returns. Using geographical data, I explore the role of local market development and access to markets in the determination of household earnings, how non-farm self-employment fits into the household earnings portfolio and the determination of household returns to education. I explore various measures of household education and discuss conceptual complexities derived from aggregating human capital over individuals and different activities within households. An extension examines the mapping of household education on income inequality. Results indicate that education explains household participation in distinct activities (including non-farm self-employment) and positively affects per capita household income. The findings support the notion that local market development (and access to markets) is important not only for the level of household earnings, but also for the earnings returns to education: households benefit from their education in more dynamic market environments.

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