Population Ageing and Entrepreneurship: Theory and Evidence From OECD Countries
Corresponding Author
Rui Zhang
International School of Economics and Management, Capital University of Economics and Business, Beijing, China
Correspondence: Rui Zhang ([email protected])
Search for more papers by this authorMengyao Kang
Lee Kong Chian School of Business, Singapore Management University, Singapore, Singapore
Search for more papers by this authorCorresponding Author
Rui Zhang
International School of Economics and Management, Capital University of Economics and Business, Beijing, China
Correspondence: Rui Zhang ([email protected])
Search for more papers by this authorMengyao Kang
Lee Kong Chian School of Business, Singapore Management University, Singapore, Singapore
Search for more papers by this authorABSTRACT
This paper studies how population ageing affects individuals' choice between entrepreneurship and employment with enterprises. We develop a theoretical model where individuals are different in their entrepreneurial ability. A representative worker integrates the professional status of all workers as: (1) a younger worker, (2) an older worker, and (3) a retiree. Entrepreneurs and workers are required to pay taxes to contribute to the pension fund. We find that a higher proportion of the elderly population leads to a lower proportion of individuals choosing to become entrepreneurs because of a higher tax burden. A higher pension replacement rate also discourages individuals from starting a business. Using data from OECD. Stat, Eurostat, and the World Bank database, our empirical results support the model's predictions.
Conflicts of Interest
The authors declare no conflicts of interest.
Open Research
Data Availability Statement
The data that support the findings of this study are available from the corresponding author upon reasonable request.
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