The Impact of Regional Age Structure on Entrepreneurship

Citation

Bonte W, Falck O & Heblich S (2009) The Impact of Regional Age Structure on Entrepreneurship. Economic Geography, 85 (3), pp. 269-287. https://doi.org/10.1111/j.1944-8287.2009.01032.x

Abstract
Empirical studies based on individual data have found an inverse U-shaped relationship between age and the decision to start a business. Other studies have shown that becoming an entrepreneur is a regional event, with potential entrepreneurs benefiting from their local networks. This article links both strands of literature by introducing age-specific peer effects. Using changes in the age distribution of the population of western German regions over time, we found-in accordance with microlevel analyses-an inverse U-shaped relationship between the regional age structure and start-up activity in a region. Moreover, our findings suggest that the age-specific likelihood of becoming an entrepreneur changes with the size of the age cohort, pointing to the existence of age-specific peer effects.

Keywords
demography; occupational choice; regional entrepreneurship; age-specific peer effects

Journal
Economic Geography: Volume 85, Issue 3