IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/25318.html
   My bibliography  Save this paper

The Causal Link between Relative Age Effect and Entrepreneurship: Evidence from 17 Million Users across 49 Years on Taobao

Author

Listed:
  • Youwei Wang
  • Yuxin Chen
  • Yi Qian

Abstract

We use an extensive panel of 17 million individuals born between 1947 and 1995 from China’s largest online marketplace, Taobao, to study the impact of RAE on the propensity to become an entrepreneur. Using events surrounding the Cultural Revolution and the issuance of the Compulsory Education Law whereby COD policies varied, we conceptualize a natural experiment to identify the RAE effects. The youngest students are 5.4% less likely to become an entrepreneur compared to the oldest within the cohort, translating to approximate 43.7 thousand additional sellers born in September with an estimated USD 1.29 billion in additional annual sales.

Suggested Citation

  • Youwei Wang & Yuxin Chen & Yi Qian, 2018. "The Causal Link between Relative Age Effect and Entrepreneurship: Evidence from 17 Million Users across 49 Years on Taobao," NBER Working Papers 25318, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25318
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w25318.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Henrekson, Magnus & Sanandaji, Tino, 2013. "Small Business Activity Does not Measure Entrepreneurship," Working Paper Series 959, Research Institute of Industrial Economics, revised 26 Jan 2014.
    2. Francine Lafontaine & Kathryn Shaw, 2016. "Serial Entrepreneurship: Learning by Doing?," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 217-254.
    3. Fairlie, Robert W & Robb, Alicia, 2005. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," Santa Cruz Department of Economics, Working Paper Series qt6td6x9ht, Department of Economics, UC Santa Cruz.
    4. Ufuk Akcigit & Murat Celik & Daron Acemoglu, 2014. "Young, Restless and Creative: Openness to Disruption and Creative Innovations," 2014 Meeting Papers 377, Society for Economic Dynamics.
    5. Nicos Nicolaou & Scott Shane & Georgina Adi & Massimo Mangino & Juliette Harris, 2011. "A polymorphism associated with entrepreneurship: evidence from dopamine receptor candidate genes," Small Business Economics, Springer, vol. 36(2), pages 151-155, February.
    6. Suziedelyte, Agne & Zhu, Anna, 2015. "Does early schooling narrow outcome gaps for advantaged and disadvantaged children?," Economics of Education Review, Elsevier, vol. 45(C), pages 76-88.
    7. Benjamin Jones & E.J. Reedy & Bruce A. Weinberg, 2014. "Age and Scientific Genius," NBER Working Papers 19866, National Bureau of Economic Research, Inc.
    8. Peter Ueda & Anna-Karin Edstedt Bonamy & Fredrik Granath & Sven Cnattingius, 2013. "Month of Birth and Mortality in Sweden: A Nation-Wide Population-Based Cohort Study," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-7, February.
    9. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
    10. Chen, Qihui, 2015. "Ready for school? Impacts of delayed primary school enrollment on children's educational outcomes in rural China," International Journal of Educational Development, Elsevier, vol. 45(C), pages 112-128.
    11. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2011. "Too Young to Leave the Nest? The Effects of School Starting Age," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 455-467, May.
    12. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
    13. Gerhard W. Weber & Hermann Prossinger & Horst Seidler, 1998. "Height depends on month of birth," Nature, Nature, vol. 391(6669), pages 754-755, February.
    14. Pierre Azoulay & Benjamin F. Jones & J. Daniel Kim & Javier Miranda, 2020. "Age and High-Growth Entrepreneurship," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 65-82, March.
    15. Brian A. Jacob & Lars Lefgren, 2004. "Remedial Education and Student Achievement: A Regression-Discontinuity Analysis," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 226-244, February.
    16. John A. List & Azeem M. Shaikh & Yang Xu, 2019. "Multiple hypothesis testing in experimental economics," Experimental Economics, Springer;Economic Science Association, vol. 22(4), pages 773-793, December.
    17. Shane, Scott & Nicolaou, Nicos, 2015. "Creative personality, opportunity recognition and the tendency to start businesses: A study of their genetic predispositions," Journal of Business Venturing, Elsevier, vol. 30(3), pages 407-419.
    18. Alex Bell & Raj Chetty & Xavier Jaravel & Neviana Petkova & John Van Reenen, 2019. "Who Becomes an Inventor in America? The Importance of Exposure to Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 647-713.
    19. Nicolaou, Nicos & Shane, Scott, 2009. "Can genetic factors influence the likelihood of engaging in entrepreneurial activity?," Journal of Business Venturing, Elsevier, vol. 24(1), pages 1-22, January.
    20. Dobkin, Carlos & Ferreira, Fernando, 2010. "Do school entry laws affect educational attainment and labor market outcomes?," Economics of Education Review, Elsevier, vol. 29(1), pages 40-54, February.
    21. Aghion, Philippe & Akcigit, Ufuk & Hyytinen, Ari & Toivanen, Otto, 2017. "The social origins of inventors," LSE Research Online Documents on Economics 86619, London School of Economics and Political Science, LSE Library.
    22. Mühlenweg, Andrea & Blomeyer, Dorothea & Stichnoth, Holger & Laucht, Manfred, 2012. "Effects of age at school entry (ASE) on the development of non-cognitive skills: Evidence from psychometric data," Economics of Education Review, Elsevier, vol. 31(3), pages 68-76.
    23. Michael Lokshin & Sergiy Radyakin, 2012. "Month of Birth and Children’s Health in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 174-203.
    24. David Deming & Susan Dynarski, 2008. "The Lengthening of Childhood," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 71-92, Summer.
    25. Kelly Bedard & Elizabeth Dhuey, 2012. "School-Entry Policies and Skill Accumulation Across Directly and Indirectly Affected Individuals," Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 643-683.
    26. Dhuey, Elizabeth & Lipscomb, Stephen, 2008. "What makes a leader? Relative age and high school leadership," Economics of Education Review, Elsevier, vol. 27(2), pages 173-183, April.
    27. Meng, Xin & Gregory, R G, 2002. "The Impact of Interrupted Education on Subsequent Educational Attainment: A Cost of the Chinese Cultural Revolution," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 935-959, July.
    28. Marc Gruber & Ian C. MacMillan & James D. Thompson, 2008. "Look Before You Leap: Market Opportunity Identification in Emerging Technology Firms," Management Science, INFORMS, vol. 54(9), pages 1652-1665, September.
    29. Dunning,Thad, 2012. "Natural Experiments in the Social Sciences," Cambridge Books, Cambridge University Press, number 9781107698000, November.
    30. Ponzo, Michela & Scoppa, Vincenzo, 2014. "The long-lasting effects of school entry age: Evidence from Italian students," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 578-599.
    31. Nicos Nicolaou & Scott Shane & Lynn Cherkas & Janice Hunkin & Tim D. Spector, 2008. "Is the Tendency to Engage in Entrepreneurship Genetic?," Management Science, INFORMS, vol. 54(1), pages 167-179, January.
    32. Cabus, Sofie J. & De Witte, Kristof, 2011. "Does school time matter?—On the impact of compulsory education age on school dropout," Economics of Education Review, Elsevier, vol. 30(6), pages 1384-1398.
    33. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    34. Todd E. Elder & Darren H. Lubotsky, 2009. "Kindergarten Entrance Age and Children’s Achievement: Impacts of State Policies, Family Background, and Peers," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    35. A. Amaral & Rui Baptista & Francisco Lima, 2011. "Serial entrepreneurship: impact of human capital on time to re-entry," Small Business Economics, Springer, vol. 37(1), pages 1-21, July.
    36. Datar, Ashlesha, 2006. "Does delaying kindergarten entrance give children a head start?," Economics of Education Review, Elsevier, vol. 25(1), pages 43-62, February.
    37. Paul Gompers & Josh Lerner & David Scharfstein, 2005. "Entrepreneurial Spawning: Public Corporations and the Genesis of New Ventures, 1986 to 1999," Journal of Finance, American Finance Association, vol. 60(2), pages 577-614, April.
    38. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    39. Nicolaou, Nicos & Shane, Scott & Cherkas, Lynn & Spector, Tim D., 2009. "Opportunity recognition and the tendency to be an entrepreneur: A bivariate genetics perspective," Organizational Behavior and Human Decision Processes, Elsevier, vol. 110(2), pages 108-117, November.
    40. Justin McCrary & Heather Royer, 2011. "The Effect of Female Education on Fertility and Infant Health: Evidence from School Entry Policies Using Exact Date of Birth," American Economic Review, American Economic Association, vol. 101(1), pages 158-195, February.
    41. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May.
    42. Plug, Erik J. S., 2001. "Season of birth, schooling and earnings," Journal of Economic Psychology, Elsevier, vol. 22(5), pages 641-660, October.
    43. Ufuk Akcigit & John Grigsby & Tom Nicholas, 2017. "The Rise of American Ingenuity: Innovation and Inventors of the Golden Age," Working Papers 2017-6, Princeton University. Economics Department..
    44. Fredriksson, Peter & Öckert, Björn, 2005. "Is Early Learning Really More Productive? The Effect of School Starting Age on School and Labor Market Performance," IZA Discussion Papers 1659, Institute of Labor Economics (IZA).
    45. Michael Hurwitz & Jonathan Smith & Jessica S. Howell, 2015. "Student Age and the Collegiate Pathway," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(1), pages 59-84, January.
    46. Dunning,Thad, 2012. "Natural Experiments in the Social Sciences," Cambridge Books, Cambridge University Press, number 9781107017665, November.
    47. Kelly Bedard & Elizabeth Dhuey, 2006. "The Persistence of Early Childhood Maturity: International Evidence of Long-Run Age Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1437-1472.
    48. Robert O Deaner & Aaron Lowen & Stephen Cobley, 2013. "Born at the Wrong Time: Selection Bias in the NHL Draft," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-7, February.
    49. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    50. Zhang, Junsen & Liu, Pak-Wai & Yung, Linda, 2007. "The Cultural Revolution and returns to schooling in China: Estimates based on twins," Journal of Development Economics, Elsevier, vol. 84(2), pages 631-639, November.
    51. Peter Fredriksson & Björn Öckert, 2014. "Life‐cycle Effects of Age at School Start," Economic Journal, Royal Economic Society, vol. 124(579), pages 977-1004, September.
    52. Gompers, Paul & Kovner, Anna & Lerner, Josh & Scharfstein, David, 2010. "Performance persistence in entrepreneurship," Journal of Financial Economics, Elsevier, vol. 96(1), pages 18-32, April.
    53. Nam, Kigon, 2014. "Until when does the effect of age on academic achievement persist? Evidence from Korean data," Economics of Education Review, Elsevier, vol. 40(C), pages 106-122.
    54. Joseph P. Romano & Michael Wolf, "undated". "Control of Generalized Error Rates in Multiple Testing," IEW - Working Papers 245, Institute for Empirical Research in Economics - University of Zurich.
    55. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    56. Du, Qianqian & Gao, Huasheng & Levi, Maurice D., 2012. "The relative-age effect and career success: Evidence from corporate CEOs," Economics Letters, Elsevier, vol. 117(3), pages 660-662.
    57. Yi Qian, 2007. "Do National Patent Laws Stimulate Domestic Innovation in a Global Patenting Environment? A Cross-Country Analysis of Pharmaceutical Patent Protection, 1978-2002," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 436-453, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peña, Pablo A., 2020. "Relative age and investment in human capital," Economics of Education Review, Elsevier, vol. 78(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pierre Azoulay & Benjamin F. Jones & J. Daniel Kim & Javier Miranda, 2020. "Age and High-Growth Entrepreneurship," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 65-82, March.
    2. Görlitz, Katja & Penny, Merlin & Tamm, Marcus, 2022. "The long-term effect of age at school entry on cognitive competencies in adulthood," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 91-104.
    3. Goncalo Lima & Luis Catela Nunes & Ana Balcao Reis & Maria do Carmo Seabra, 2022. "No country for young kids? The effects of school starting age throughout childhood and beyond," Nova SBE Working Paper Series wp639, Universidade Nova de Lisboa, Nova School of Business and Economics.
    4. Görlitz, Katja & Penny, Merlin & Tamm, Marcus, 2019. "The long-term effect of age at school entry on competencies in adulthood," Ruhr Economic Papers 792, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Suziedelyte, Agne & Zhu, Anna, 2015. "Does early schooling narrow outcome gaps for advantaged and disadvantaged children?," Economics of Education Review, Elsevier, vol. 45(C), pages 76-88.
    6. Huang, Cheng & Zhang, Shiying & Zhao, Qingguo, 2020. "The early bird catches the worm? School entry cutoff and the timing of births," Journal of Development Economics, Elsevier, vol. 143(C).
    7. Elizabeth U. Cascio & Diane Whitmore Schanzenbach, 2016. "First in the Class? Age and the Education Production Function," Education Finance and Policy, MIT Press, vol. 11(3), pages 225-250, Summer.
    8. Dionissi Aliprantis, 2014. "When Should Children Start School?," Journal of Human Capital, University of Chicago Press, vol. 8(4), pages 481-536.
    9. Depew, Briggs & Eren, Ozkan, 2016. "Born on the wrong day? School entry age and juvenile crime," Journal of Urban Economics, Elsevier, vol. 96(C), pages 73-90.
    10. Guo, Chuanyi & Wang, Xuening & Meng, Chen, 2023. "Does the early bird catch the worm? Evidence and interpretation on the long-term impact of school entry age in China," China Economic Review, Elsevier, vol. 77(C).
    11. Luís Martins & Manuel Coutinho Pereira, 2017. "Disentangling the channels from birthdate to educational attainment," Working Papers w201706, Banco de Portugal, Economics and Research Department.
    12. Claire Crawford & Lorraine Dearden & Ellen Greaves, 2014. "The drivers of month-of-birth differences in children's cognitive and non-cognitive skills," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 177(4), pages 829-860, October.
    13. Daniel Rakotomalala, 2020. "The effects of age on educational performances at the end of primary school : cross-sectional and regression discontinuity approach applications from Reunion Island," TEPP Working Paper 2020-06, TEPP.
    14. Rashmi Barua & Kevin Lang, 2009. "School Entry, Educational Attainment and Quarter of Birth: A Cautionary Tale of LATE," NBER Working Papers 15236, National Bureau of Economic Research, Inc.
    15. Fumarco, L. & Baert, S. & Sarracino, F., 2020. "Younger, dissatisfied, and unhealthy – Relative age in adolescence," Economics & Human Biology, Elsevier, vol. 37(C).
    16. Michael Bahrs & Mathias Schumann, 2020. "Unlucky to be young? The long-term effects of school starting age on smoking behavior and health," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(2), pages 555-600, April.
    17. Claire Crawford & Lorraine Dearden & Ellen Greaves, 2013. "The impact of age within academic year on adult outcomes," DoQSS Working Papers 13-05, Quantitative Social Science - UCL Social Research Institute, University College London.
    18. Hemelt, Steven W. & Rosen, Rachel B., 2016. "School Entry, Compulsory Schooling, and Human Capital Accumulation: Evidence from Michigan," IZA Discussion Papers 9889, Institute of Labor Economics (IZA).
    19. Claire Crawford & Lorraine Dearden & Ellen Greaves, 2013. "The drivers of month of birth differences in children's cognitive and non-cognitive skills: a regression discontinuity analysis," IFS Working Papers W13/08, Institute for Fiscal Studies.
    20. Page, Lionel & Sarkar, Dipanwita & Silva-Goncalves, Juliana, 2019. "Long-lasting effects of relative age at school," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 166-195.

    More about this item

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:25318. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.