Gender Inequality and Youth Demographics as Determinants of Entrepreneurship: A Cross- and Within-Country Analysis

Abstract

This paper studies whether a country’s level of gender inequality and its share of the population in the youth demographic are significantly correlated with its rate of entrepreneurship. Performing cross- and within-country analyses and using variations of fixed effects panel regressions, I find that while gender inequality is negatively correlated with entrepreneurship unconditionally, its significance is dependent on controlling for education and fixed effects. This supports my hypothesis that more gender inequality is associated with lower levels of entrepreneurship. The result can be explained by previous literature that finds that women entrepreneurs are held to different standards than males when attaining financing. I do not find a robust correlation between the share of the population in the youth demographic and entrepreneurship; its statistical significance is not robust either. This confirms my hypothesis and aligns with previous literature that shows the association between age and business formation can work both negatively and positively. Ultimately, this paper’s results can assist governments in understanding the drivers and laggards of their entrepreneurship growth rates. As new businesses play a part in advancing societies forward, it is essential that countries, governments, and citizens understand the drivers of entrepreneurship.