Does Higher Education Make You More Entrepreneurial? Causal Evidence from China

41 Pages Posted: 10 May 2021

See all articles by Bin Huang

Bin Huang

Nanjing University of Finance and Economics

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

Yu Zhu

University of Dundee

Abstract

Using the 2017 China Household Finance Survey (CHFS), we estimate the effect of higher education on entrepreneurship for prime-aged males. We distinguish between own-account workers and employers of small and large businesses, respectively, and use the higher education expansion in China starting in 1999 and instruments of pre-school hukou status to help identify causal effects. While our Inverse Probability Weighted Regression Adjustment estimates show that people with more education are less likely to enter entrepreneurship in general, obtaining any qualification beyond the baseline of compulsory schooling significant increases large business ownership later in life, with the maximum effect corresponding to a 3-fold increase found for university graduates. We attribute this effect to graduates taking full advantage of the opportunities presented by access to education earlier on in their lives.

JEL Classification: I25, J24, L26

Suggested Citation

Huang, Bin and Tani, Massimiliano and Zhu, Yu, Does Higher Education Make You More Entrepreneurial? Causal Evidence from China. IZA Discussion Paper No. 14310, Available at SSRN: https://ssrn.com/abstract=3841891

Bin Huang

Nanjing University of Finance and Economics ( email )

Nanjing
China

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Yu Zhu (Contact Author)

University of Dundee ( email )

Dundee, Scotland DD1 4HN
United Kingdom

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