Giving Compass' Take:
- Rachel Cramer discusses the results of a study that examined the impact of additional education on people becoming entrepreneurs.
- How can you support entrepreneurs of marginalized identities like women, people of color and people at both intersections?
- Learn about social entrepreneurship.
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A new study offers evidence that more education can increase entrepreneurship in the United States, especially among women.
Economics professor John Winters and graduate student Kunwon Ahn report their findings in the journal Small Business Economics.
“The benefits of education are often debated. Some worry it’s mostly about signaling rather than skill development, but our study provides a piece of evidence that additional years of education after high school can boost self-employment in high growth industries,” says Winters.
To build their economic model, the researchers relied on the US Census Bureau’s American Community Survey. Ahn and Winters examined employment and education data on nearly 8.2 million people born in the US between 1963 and 1990. They then spliced their samples by state and birth year to link changes in education levels to changes in self-employment rates.
In order to have large enough sample sizes for every state between 1963 and 1990, the researchers used employment and education data from white, non-Hispanic adults.
“Our empirical method only allows us to look at people born in the United States, and we need large comparable groups for our approach to give accurate results,” explains Winters.
The researchers then categorized industries as “high growth,” “low-to-middle growth,” and “shrinking” based on industry employment growth data between 2006 and 2019 from the US Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.
“Some of the high growth industries are what we’d expect: e-commerce and computer and data processing services. But they also included childcare, veterinary services, and newer sub-industries in health, education, and social services that emerged with smartphones and the explosion of apps,” says Winters.
Food processing, trucking, and grocery stores were among the low-to-middle growth industries. Automobiles, electronics, and other sectors of manufacturing dominated the shrinking industries category, along with some retailers that sold clothing, movies, and music.
Read the full article about education and entrepreneurship by Rachel Cramer at Futurity.