Helping when it matters: Optimal time for supporting women’s self‐employment in India

Motivation Governments support women’s self‐employment as a means to support women’s empowerment. While they tend to do this by providing financial assistance, skills development and vocational training, they have not paid enough attention to entrepreneurship‐related education in the school curriculum. The article addresses this research and policy gap. Purpose While education may lead women to take up self‐employment, anecdotal evidence also suggests that as women continue towards higher education, they tend to opt for wage employment. We investigate whether secondary school is the ideal time to encourage young women to take up self‐employment. Approach and Methods To test our hypothesis, we used two rounds of the Indian Human Development Survey (IHDS) dataset as it contains granular information about education and self‐employment at the individual level. We analysed data in univariate and multivariate settings. Findings Our results indicate that while education is a key dimension for women’s self‐employment earnings, its effects peak at moderate levels of secondary education. We find that the increase in business income for each additional year of schooling between classes 9 and 12 (ages 15 to 18) is more than four times that from classes 1–8 and over twice that beyond class 12. We also find that social factors, such as marriage and infrastructure, have implications for the returns of education to women’s income from running a business. Policy implications To improve women’s economic and social empowerment, policy‐makers should encourage women to attain higher levels of education, since it is a significant predictor of entrepreneurial endeavours. Second, the 9–12 curriculum should focus on making girls and young women more aware of entrepreneurship and encourage them to take up self‐employment.