Ageing and entrepreneurship across Dutch regions

In this study we examine whether the ageing of the Dutch labour force has had an effect on entrepreneurship rates in the recent past, and if it is likely to have an effect in the future. Because we only have data on a relatively short period of time (2001 – 2009), we focus on variation between regions instead of variation across time. The first two research questions of this study are therefore: to which extent are regional differences in business ownership rates and in start-up rates related to regional differences in the age composition of the workforce? To answer these questions, we have applied a shift-share analysis on available data on the age composition of the labour force and entrepreneurship rates for 12 Dutch provinces for the years 2001 - 2009. We find that there is indeed an age composition effect: regional deviations from the national age structure of the labour force can partly account for regional deviations from the national entrepreneurship rates. This applies for business ownership rates as well as start-up rates. The size of this age composition effect is however not very large. By combining these identified age composition effects with expected changes of the age structure of the Dutch workforce (between 2010 and 2060), we have been able to answer the third and final research question of this study, to which extent the ageing of the workforce would affect entrepreneurship rates at national level. Our results show that there is hardly any effect to be expected. This lack of impact may be due to the combination of different factors. First of all, the identified age composition effects are not very large. Secondly, the expected changes in the shares of the different age groups may not be large enough to cause large changes in the entrepreneurship rates. Finally, the changes that do occur for different age groups may counteract each other.