Across Studies, Education Common Factor in Increased Entrepreneurship
Jun 14th, 2010 | By Dawn R. Rivers | Category: ResearchLast month, we took a look at research that examined entrepreneurship and regional economic growth, while using a data set that firmly excluded nonemployer businesses. Last week, the SBA Office of Advocacy released new research that examines entrepreneurial activity by looking at what percentage of workers in a regional Labor Market Area (LMA) is self-employed. Their key finding was that growth in the number of proprietors is positively associated with higher levels of “human capital,” as measured by number of college graduates with a certain LMA.
This is not to say that larger numbers of educated people make for more proprietors but simply that human capital appears to be a factor that makes an area more desirable to live in. Such areas are shown to spur increases in numbers of both proprietors and wage earners. Interestingly, natural amenities such as rugged terrain and proximity to water is an important factor that makes a region attractive, as well as wealth and low unemployment. Self-employment growth is higher for women and those in the 45-64 age group than for men and those in the 25-44 age group. Also interestingly, other proxies for human capital, such as local government spending on education and the presence of universities within an LMA yield different effects over time and across regions.
