The Role of Role Models

Mirjam van Praag offers insights into her current research:

24 September 2015

Role models. We hear so much about them, but not really from economists. Do role models play a part in the choices people make, how they behave or even perform? We look at education and training, reward and taxes as key influencers for people´s behaviour. Could role models also be a policy instrument? It hasn’t been picked up by economists yet. Surprising when you look at it, as it would seem a rather obvious choice. What´s more, role models don´t have to cost a lot. I have found that most people are only too happy to act as a role model. Role models to stimulate excellent entrepreneurship. Entrepreneurs are only too happy to share their stories with students or young entrepreneurs. Role models that help smokers quit. Role models that inspire young migrants from deprived districts to start and finish an education that will help them find a future on the labour market. Role models to take up sports, or to promote safety and emancipation. You name it. What a great idea. Isn’t it?

The effect of using role models has been studied extensively, mostly in social psychology. I recently contributed to a number of studies that show that role models could play a part in stimulating entrepreneurship. Role models are persons that set a meaningful example. The people they inspire can often identify with them, and they tend to know each other. They are close, and generally not icons. If someone choses a role model, it is often someone who resembles him or her. Women tend to have female role models. Entrepreneurs, too, often meet this ‘homophily’[1] criterion when selecting role models.[2] So how do we know that role models promote entrepreneurship?

In a study into whether entrepreneurship is the result of ‘nature’ rather than ‘nurture’, we followed 5000 adopted Swedes[3]. We had access to their full labour market details. Not only that, we also had the labour market details for their adoptive parents. And, and this is unthinkable in the Netherlands, we even had the details for the adopted children´s biological parents (even if the adopted children did not know their biological parents).

It confirmed what we knew already – the entrepreneurial activity of adopted children is very much related to the entrepreneurship of their adoptive parents. But what we didn’t know was that biological parents (‘nature’) also play an important role: it appears that there are some genetically determined characteristics or skills that stimulate entrepreneurship. Still, adoptive parents (‘nurture’) play a greater role. Their influence is twice as strong as that of biological parents. A closer inspection of the greater role of adoptive parents revealed that sons are influenced almost exclusively by entrepreneurial fathers, and daughters by their mothers. It suggests that parents are potentially strong role models.

An upcoming study carried out on the basis of Danish data (still being processed) is expected to show the same pattern for entrepreneurial bosses and employees. We will use econometric techniques to study how entrepreneurs who hire staff influence them to become active entrepreneurs. Again, we expect that entrepreneurs inspire their employees particularly in being entrepreneurial if they are of the same sex. Probably the effect will be most pronounced for women (the minority). Hence, role models might even contribute to reducing the labour market gap between men and women.

Undeniably, these results are food for thought. Role models are being used across the board. People with a role model can actually be influenced by them. Moreover, role models seem happy to act as one. Unfortunately, there is often not much to support them in their role, and it is rarely seen as an alternative to reward, punishment, training or other behaviour-influencing measures, or as an alternative to tackling the differences between men and women on the labour market. I would not be surprised if further studies would demonstrate that role models are an effective and cheap alternative to be used in a wide range of economic or related areas.

Mirjam van Praag

[1] The term ‘homophily’ is often associated with homosexuality, rather than its actual meaning, which is having a preference for the same (as you).

[2] Bosma, N., Hessels, J., Schutjens, V., van Praag, C.M. & Verheul, I. (2012), Entrepreneurship and role models Journal of Economic Psychology, 33, pp. 410-422

[3] Lindquist, M., Sol, J. & van Praag, C.M. (2015), Why do Entrepreneurial Parents have Entrepreneurial Children? Journal of Labor Economics, Vol. 33, No. 2, 4.2015, pp. 269-296

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