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Demographics and Entrepreneurship

James Liang, Hui Wang and Edward Lazear

No 20506, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Entrepreneurship requires energy and creativity as well as business acumen. Some factors that contribute to entrepreneurship may decline with age, but business skills increase with experience in high level positions. Having too many older workers in society slows entrepreneurship. Older workers do not possess the advantages of youth, but more significant is that when older workers occupy key positions they may block younger workers from acquiring business skills. A formal theoretical structure is presented and tested using the Global Entrepreneurship Monitor data. The results imply that a one-standard deviation decrease in the median age of a country increases the rate of new business formation by 2.5 percentage points, which is about forty percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.

JEL-codes: J11 L26 M51 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-age, nep-ent and nep-ltv
Note: IO LS
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Published as James Liang & Hui Wang & Edward P. Lazear, 2018. "Demographics and Entrepreneurship," Journal of Political Economy, vol 126(S1), pages S140-S196.

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Journal Article: Demographics and Entrepreneurship (2018) Downloads
Working Paper: Demographics and Entrepreneurship (2014) Downloads
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