Demographics and Entrepreneurship

James Liang, Hui Wang and Edward Lazear

Journal of Political Economy, 2018, vol. 126, issue S1, S140 - S196

Abstract: Entrepreneurship requires energy and creativity as well as business acumen. Some factors that contribute to entrepreneurship decline with age, but business skills increase with experience in high-level positions. Having too many older workers in society slows entrepreneurship. When older workers occupy key positions, they block younger workers from acquiring skills. A theory is formulated and tested using the Global Entrepreneurship Monitor data. A one standard deviation decrease in a country’s median age increases new business formation by 2.5 percentage points, which is about 40 percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.

Date: 2018
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Related works:
Working Paper: Demographics and Entrepreneurship (2014)
Working Paper: Demographics and Entrepreneurship (2014)
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