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Punctuated Entrepreneurship (Among Women)
Punctuated Entrepreneurship (Among Women)
Working Paper Number CES-18-26
Abstract
The gender gap in entrepreneurship may be explained in part by employee non-compete agreements. Exploiting exogenous state-level variation in non-compete policy, I find that women more strictly subject to non-competes are 11-17% more likely to start companies after their employers dissolve. This result is not explained by the incidence of non-competes or lawsuits; however, women face higher relative costs in defending against potential litigation and in returning to paid employment after abandoning their ventures. Thus entrepreneurship among women may be “punctuated” in that would-be female founders are throttled by non-competes, their potential unleashed only by the failure of their employers.
Page Last Revised - October 8, 2021
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