Interacting with Entrepreneurs Early on Helps Girls Succeed

A WORKING PAPER BY AXA LAB RESEARCH FELLOW VIOLA SALVESTRINI AND COLLEAGUES FINDS WAYS TO PLUG GENDER GAPS IN DEVELOPED COUNTRIES

Interacting with people with entrepreneurial experience at a young age significantly increases a girl’s likelihood to become an entrepreneur herself later in life, but makes no difference for boys. This is one of the most important conclusions of a working paper by Viola Salvestrini, postdoctoral fellow at Bocconi’s AXA Research lab on Gender Equality, written with Mikkel Mertz of Queen Mary University of London and Rockwool Foundation, and Maddalena Ronchi of Northwestern University.
 
Despite some progress in the last few decades, women are still rather strongly underrepresented among entrepreneurs, even in those well-developed countries that have a good record in terms of gender equality. This fact is not just unfair towards women, it actually has implications for the entire society as any waste of entrepreneurial talent means lost economic growth and lost jobs. However, not much is known about how entrepreneurship could be promoted among women.
 

One possible factor likely to improve women’s entrepreneurship rates is what the authors call “exposure to entrepreneurship” during adolescence, defined for people in school age as the share of school peers whose parents are entrepreneur. To verify the importance of this factor, the authors turned to the excellent Danish registry database, which provides individual-level administrative data covering the entire Danish population from 1980 onward.
 
The effects of exposure during the last years of compulsory schooling (when individuals are 13-16 years old) for female students are statistically significant: moving from the 25th percentile of the exposure distribution to the 75th percentile increases girls' probability of entering entrepreneurship by age 35 by approximately 4%. The analysis suggests that women are affected by exposure especially by acquiring specific information, or becoming more aware of entrepreneurship as a potential career. No such change is detected for boys.
 
Another part of the paper intriguingly assesses what career paths these women might have pursued had they not been exposed to entrepreneurs during adolescence, through what the authors call “counterfactual analysis”. Data show that early exposure decreases girls' probability of discontinuing education right after compulsory school. It also increases their probability of completing upper secondary vocational education, a path that is frequently associated with entrepreneurship and one that women are less likely to undertake. In terms of career outcomes, exposure to entrepreneurship reduces women's' likelihood of ending up in low-paying jobs.
 
“We establish that early exposure enables us to tap into a broader pool of entrepreneurial talent by showing that the increase in female entrepreneurship is associated with the creation of businesses that are larger and that survive for longer than the top performing entrepreneurial firms in the economy,” says Viola Salvestrini. “We also show that increasing female entrepreneurship via early exposure can benefit society at large by increasing the diversity and inclusivity of job opportunities through the creation of more female-friendly firms.”
 
Mikkel Mertz, Maddalena Ronchi, Viola Salvestrini, “Female representation and talent allocation in entrepreneurship: the role of early exposure to entrepreneurs”, working paper
 

by Andrea Costa