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The value of an educated population for an individual's entrepreneurship success

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  • André van Stel
  • Mirjam van Praag
  • José Maria Millán
  • Emilio Congregado
  • Concepcion Roman

Abstract

Human capital obtained through education has been shown to be one of the strongest drivers of entrepreneurship performance. The entrepreneur’s human capital, though, is only one of the input factors into the production process of her venture. In this paper we will analyze to what extent the education levels of other (potential) stakeholders affect the entrepreneur’s performance. The education level of consumers may shape the demand function for an entrepreneur’s output, whereas the education level of employees may affect the entrepreneur’s productivity and thereby shape her supply function. Based on this, we hypothesize that the performance of an entrepreneur is not only affected positively by her own education level but in addition, also by the education level of the population. We find empirical support for this hypothesis using an eight years (1994-2001) panel of labor market participants in the EU-15 countries. An implication of our finding is that entrepreneurship and higher education policies should be considered in tandem with each other.

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Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H201103.

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Length: 39 pages
Date of creation: 23 Sep 2013
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Handle: RePEc:eim:papers:h201103

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Entrepreneurs need an educated workforce
    by Economic Logician in Economic Logic on 2011-05-23 14:53:00
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Cited by:
  1. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
  2. Millán, Ana & Millán, José María & Román, Concepción & van Stel, André, 2013. "How does employment protection legislation influence hiring and firing decisions by the smallest firms?," Economics Letters, Elsevier, vol. 121(3), pages 444-448.
  3. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 83-106.
  4. Nicola Gennaioli & Rafael Laporta & Florencio López-de-Silanes & Andrei Schleifer, 2011. "Human capital and regional development," Economics Working Papers 1286, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2012.
  5. Emilio Congregado & José María Millán & Concepción Román, 2014. "The emergence of new entrepreneurs in Europe," Economie Internationale, CEPII research center, issue 138, pages 28–48.
  6. Teruel Carrizosa, Mercedes & De Wit, Gerrit, 2011. "Determinants of high-growth firms:why do some countries have more high-growth firms than others?," Working Papers 2072/179670, Universitat Rovira i Virgili, Department of Economics.
  7. André van Stel & José Maria Millán & Concepcion Roman & Ana Millán, 2014. "Unraveling the relationship between the business cycle and the own-account worker's decision to hire employees," Scales Research Reports H201302, EIM Business and Policy Research.
  8. André van Stel & Sander Wennekers & Jolanda Hessels & Chantal Hartog, 2011. "Global Entrepreneurship Monitor 2010 The Netherlands," Scales Research Reports A201108, EIM Business and Policy Research.

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