The baby (s)he grows : investigating the causes of gender differences in entrepreneurial quality

Abstract

Recent reports suggest that female entrepreneurs are increasingly relevant to business dynamism and economic growth, but it appears that they may be forming different types of businesses relative to male entrepreneurs. Using a homogeneous sample of MIT alumni, this study applies a novel methodology to assess these gender-based dynamics. Building upon the Guzman and Stern (2016b) methodology, I link alumni survey results to state business registration and USPTO administrative data to develop estimates of entrepreneurial quality. Next, I study the gender differences observed in entrepreneurial participation and build evidence regarding how entrepreneurial quality is intertwined with personal characteristics such as gender, parental status and age of children, controlling for human capital. I find that the presence of young children motivates the entrepreneurial entry of both parents, with a more salient relationship for mothers. Female graduates with young children are 4.2% more likely to found a for-profit firm than female graduates with older children. The equivalent increase for male graduates is only 1.8%. [ show that females lag their male counterparts in the probability of founding a firm with high growth potential particularly when they pursue entrepreneurship as parents of preschool age children. While preschool fathers are 0.5% more likely than those with older children to found a firm with high growth probability, there is no significant growth probability premium for mothers of young children. Keywords: entrepreneurship, entry, growth, performance, gender, female, women, parents, children, age, preschool, work-family, conflict, alumni, public, policy.