Elert, Niklas; Andersson, Fredrik; Wennberg, Karl
Working Paper
The Impact of Entrepreneurship Education in High
School on Long-Term Entrepreneurial Performance
IFN Working Paper, No. 1063
Provided in Cooperation with:
Research Institute of Industrial Economics (IFN), Stockholm
Suggested Citation: Elert, Niklas; Andersson, Fredrik; Wennberg, Karl (2015) : The Impact of
Entrepreneurship Education in High School on Long-Term Entrepreneurial Performance, IFN
Working Paper, No. 1063, Research Institute of Industrial Economics (IFN), Stockholm
This Version is available at:
http://hdl.handle.net/10419/109128
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IFN Working Paper No. 1063, 2015
The Impact of Entrepreneurship Education in
High School on Long-Term Entrepreneurial
Performance
Niklas Elert, Fredrik Andersson and Karl Wennberg
Research Institute of Industrial Economics
P.O. Box 55665
SE-102 15 Stockholm, Sweden
info@ifn.se
www.ifn.se
The impact of entrepreneurship education in high school on
long-term entrepreneurial performance
Niklas Elert
1
, Fredrik Andersson
2
, and Karl Wennberg
3
Abstract: This paper studies the long-term impact of entrepreneurship education and
training in high school on entrepreneurial entry, performance, and survival. Using
propensity score matching, we compare three Swedish cohorts from Junior
Achievement Company Program (JACP) alumni with a matched sample of similar
individuals and follow these for up to 16 years after graduation. We find that while
JACP participation increases the long-term probability of starting a firm as well as
entrepreneurial incomes, there is no effect on firm survival.
Keywords: Entrepreneurship Education, Quasi-experiment, Performance
JEL-codes: D22, L25, L26
Acknowledgements: We are grateful for comments from Anders Bornhäll, Rasmus
Rahm, and seminar participants at the Research Institute of Industrial Economics and
Aarhus University. Research funding from the Jan Wallander and Tom Hedelius
Foundation is gratefully acknowledged.
* Corresponding author. niklas.elert@ifn.se, +46703902751. Research Institute of Industrial
Eco
nomics (IFN), Box 55665, SE-102 15, Stockholm, Sweden. The collaboration leading up to
this paper was initiated when Elert was a Ph.D. candidate at Örebro University and an associate at
the Ratio Institute.
2
Statistics Sweden Klostergatan 23, SE-701 89 Örebro, Sweden.
3
karl.wennberg@hhs.se, Stockholm School of Economics, SE-113 83 Stockholm, Sweden; & the
Ratio Institute.
1
1 Introduction
Recent decades have seen a large increase across the globe in entrepreneurship
education and training (EET) programs (Fayolle 2000; Linán 2004; Kuratko 2005;
O’Connor 2013; OECD 2007). The goals of most such efforts are to increase the rate
and quality of firms started (Holtz-Eakin, 2000; Fairlie et al., 2014; Inci, 2013;
Leibenstein, 1987; Weitzel et al., 2010). Despite growing research interest in these
programs, little is known about their long-term effects (Martin et al. 2013). Further,
little attention has been paid to EET programs that target students in primary or
secondary schools. This lack of knowledge is problematic as these children comprise
the vast majority of students enrolled in education worldwide (Rosendahl Huber et al.
2012). It also makes it difficult to infer which skills such programs may foster and to
identify mechanisms facilitating the accumulation of entrepreneurial skills.
Additionally, it makes resource allocation to such programs highly uncertain.
Studies employing quasi-experimental methods have found that EET often exhibits
weak or no effects on short-term outcomes such as entrepreneurial intentions
(Oosterbeek et al. 2010; von Greavenitz et al. 2010) but may foster non-cognitive
skills relevant for entrepreneurship (Rosendahl Huber et al. 2012; von Greavenitz et
al. 2010). To date, few studies use rigorous research designs to investigate the impact
of EET on actual outcomes such as entrepreneurial entry or performance (Martin et
al. 2013). The studies that do consider such outcomes are often limited by small
samples, self-selection of participants and short time periods between undergoing
EET and subsequent outcomes. Furthermore, few of them consider the effect of EET
on entrepreneurial income and firm survival.
In this paper, we try to fill this research gap by investigating the effects of the Junior
Achievement Company Program (JACP), a program available to students in Swedish
high-schools. We follow three cohorts of students who participated in JACP in the
mid-1990s to investigate the long-term effects of the program. To minimize self-
selection problems we use propensity score matching (PSM) to match JACP alumni
to non-alumni with the same probability of participating in JACP based on a number
of background characteristics. While there are limitations to PSM, it does allow us to
ask an important hypothetical question: if a student from the mid-1990s was
presented with the opportunity to participate in JACP, what were the effects on their
entrepreneurial performance in the long term compared to if they had not
participated?
We follow individuals up to 16 years after graduation—that is, into their early middle
age. The long time period of investigation is important as individuals’ probability to
start a firm has been shown to be highest during their 30s and early 40s (Delmar and
Davidsson 2000). Our study is also advantageous in terms of sample size. Most
experimental studies are limited to samples of perhaps a few hundred treated and non-
treated subjects. Ours, by contrast, covers thousands of individuals. Further, we focus
on entrepreneurial outcomes rather than entrepreneurial intentions. Specifically, we
investigate the effect of JACP participation on (1) the probability of starting a firm,
and the previously understudied outcomes (2) entrepreneurial income, and (3) firm
survival.
2
Our results show that JACP participation increases the probability of individuals to
engage in entrepreneurship by starting a firm and that their income from the firm will
be higher when selection into the program is controlled for. We find no effect of
JACP participation on subsequent firm survival, a result in line with earlier studies
concerning entrepreneurial opportunity costs (c.f. Amit et al., 1995).
The remainder of the paper is outlined as follows. Section 2 is a summary of our
current state of knowledge regarding the relationship between EET and
entrepreneurship. In Section 3, we give a background on JACP, describe how we
employed datasets from Statistics Sweden (SCB), and our approach of matching
students using PSM to correct for student self-selection to JACP. Section 4 shows the
results of estimates of the effect of JACP participation on entrepreneurial outcomes
up to 16 years later. Finally, Section 5 provides a summary and discussion.
2 Education and training in entrepreneurship
Human capital attributes such as education, relevant experiences and specific
knowledge have long been argued to be critical for entrepreneurial success (Iyigun
and Owen, 1998; Gimeno et al., 1997). Recent meta-analyses demonstrate that while
the relationship between general education and entrepreneurial entry generally is
weak, the relationship between education and entrepreneurial performance such as
self-employment income, firm survival, profits or growth, is unambiguously positive
(Van der Sluis et al., 2008; Unger et al., 2011; see also Van Praag et al., 2013: 376-
378).
However, human capital in an entrepreneurial setting means more than formal
education. In their meta-analysis, Unger et al. (2011) find that indicators of human
capital that are more closely associated to entrepreneurial tasks were more closely
related to entrepreneurial success, underscoring the importance of specific human
capital. Pointing to Lazear’s (2004) suggestion that entrepreneurs are “Jacks of all
trades”, who need a broad mixture of skills to be successful, Van der Sluis et al.
(2008) argue that besides level of education, the choice of school courses or training
programs could be an important determinant of entrepreneurship. They add that little
is known in the literature about the effect of such specific training on entrepreneurial
outcomes.
This said, the more common type of theoretical business educations seem ill suited to
represent the economic reality of entrepreneurs (Garavan and O’Cinneide 1994), a
reality characterized by scarce resources, intuitive decision making, and the need to
interpret other people’s goals and aspirations (Casson, 1982; Sarasvathy, 2001).
Many studies show that successful entrepreneurship is more strongly related to
previous entrepreneurial experience rather than formal education (Dencker et al.,
2009; Folta et al., 2006; Martin et al., 2013; Toft-Kehler et al., 2014). Furthermore,
many studies suggest that a broad mixture of skills is more important for
entrepreneurial success than a specific education or degree (Lazear, 2004;
Leibenstein, 1987; Wagner, 2003). Taken together, this points towards the theoretical
3
