Female Representation and Talent Allocation in Entrepreneurship: The Role of Early Exposure to Entrepreneurs

Abstract

This paper shows that exposure to entrepreneurs during adolescence increases women’s entry and performance in entrepreneurship and improves the allocation of talent in the economy. Using population-wide registry data from Denmark, we exploit idiosyncratic within-school, cross-cohort variation in early exposure to entrepreneurs, measured by the share of an adolescent’s peers whose parents are entrepreneurs at the end of compulsory school. Early exposure, particularly to the entrepreneur parents of female peers, encourages girls’ entry and tenure into this profession, while it has no impact on boys. This effect is associated with the creation of successful and female-friendly firms. Furthermore, early exposure reduces women’s probability to discontinue education at the end of compulsory school and to hold low wage jobs through their lives. Finally we find evidence in support of three main channels: (i) access to specific information; (ii) changes in aspirations and goals; (iii) increased consideration of entrepreneurship as a potential career. Together these results challenge the view that the most successful female entrepreneurs would enter this profession regardless of early exposure.