A Study On Human Capital Pricing Of Entrepreneurs

The theory of human capital pricing can be called preceding research in modern economics, which is combination of enterprise theory,human capital theory. The three concepts, labor value, human capital and entrepreneur,lead to the birth and development of classical economics parties'labor value theory and marginal parties'subjective labor value theory, the popularity of human capital theory and the further research in entrepreneur spirit. Those three concepts have profound impact on our research of human capital pricing. Furthermore,using different parties'ideas in economics thought history is significant.The thesis combines qualitative analysis and empirical study, management and economics. The process of theory analysis gets through all different parties'methodology and evolution trend in economics theory. The model is built on the basis of one of the most recognized methods called International Position Evaluation, which is popular in management consulting area nowadays. The evaluation method is to make a quantitative estimation according to the importance of seven impact factors. At the same time,dividing method raised by Oaxaca (1973) gets into use in our thesis. The characteristic of this method is to divide the model into difference in variables part and difference in coefficients part. Human capital of entrepreneur is divided into two parts. Difference in variables part is the first two variables, area variable and industry variable,which explain the characteristic of human capital in human capital pricing of entrepreneur,or,the general characteristic of human capital. They can also explain the difference between different entrepreneurs or common employees. The difference in coefficients part actually explains the entrepreneur characteristic, that is, the difference in human capital value between the entrepreneurs and common employees in the same area and the same industry. The part is qualitative variable. However, responsibility of entrepreneur and ability of entrepreneur belong to descriptive variables. The uncountable part results in the confuse of academic research. The approach is though comparing entrepreneurs'wages to employees'wages in the same industry and area which is counted by the rate of these two wages. This is named entrepreneur coefficients.The result of the empirical study is as follows:From the respect of four influence factors including area,industry, responsibility of entrepreneur and ability of entrepreneur, the development of area is strongly, obviously positively associated with wages. The sample of industry in whole data is highly obvious and gets an outstanding goodness. That proves this regression matches the reality. But low coefficient tells industry factor has limited impact on human capital pricing. Entrepreneur ability and responsibility measurement adopts, as what said above, EC (entrepreneur coefficients) factor. This factor can be to measure the difference between entrepreneurs and employees. Though wages are different in the influence of industry and area, more importantly,the difference of entrepreneurs and employees plays the leading role. Data shows, the quantity of EC is about 0.965. That is amazing, because that means the wage gap between entrepreneurs and employees accounts for 96.5% of entrepreneurs'wage,and the rest 3.5% stands for other factors. Furthermore, in the whole, EC is increasing all the time, which explains the increasing wage gap. This can be proved in the economy nowadays. After Chinas economy experiences the high in equable development in nearly one fourth century, the consistency of development and the gap between the wealth and the poor is primary problem in China's economy. Fact shows, this is a problem which is more and more worse.