Violence, class, and entrepreneurship

What are the long-term causal effects of childhood exposure to political violence during China’s Cultural Revolution (1966–1976) on entrepreneurship in adulthood? Using a difference-in-differences framework, we exploit variations in exposure to mass killings across regions, cohorts, and socialist social classes. The results show that exposure to more intense violence during middle childhood and adolescence reduces the likelihood of becoming an entrepreneur later in life. This adverse effect is heterogeneous by class background. Individuals from advantaged socialist classes experience a weaker decline in entrepreneurial propensity compared with those from disadvantaged classes, suggesting that favourable political status in the pre-reform era partly mitigates the enduring consequences of childhood violence exposure. We further find that males primarily drive the negative effect on entrepreneurship.