Does A More Educated Population Enhance Entrepreneurship?

This paper studies the impact of a population’s educational level on the entrepreneurship of an economy. Using a dataset from China’s national population censuses from 1990 to 2020 and two-way fixed effects models, we find an inverted U-shaped relationship between the average years of schooling of a population and the entrepreneurship rate. Moreover, we use fractions of the population with different educational levels as key independent variables and find that only a larger population with a senior high school education can significantly increase entrepreneurship. A larger fraction of people with a college education or higher education, however, does not have a significant effect on entrepreneurship.