Neurophysiological markers of emotion regulation predict efficacy of entrepreneurship education.

Recent evidence shows that programs targeting the socio-emotional dimensions of entrepreneurship-e.g., resilience, personal initiative, and empathy-are more highly correlated with success along with key business metrics, such as sales and survival, than programs with a narrow, technical bent-e.g., accounting and finance. We argue that programs designed to foster socio-emotional skills are effective in improving entrepreneurship outcomes because they improve the students' ability to regulate their emotions. They enhance the individuals' disposition to make more measured, rational decisions. We test this hypothesis studying a randomized controlled trial (RCT, RCT ID: AEARCTR-0000916) of an entrepreneurship program in Chile. We combine administrative data, surveys, and neuro-psychological data from lab-in-the-field measurements. A key methodological contribution of this study is the use of the electroencephalogram (EEG) to quantify the impact of emotional responses. We find that the program has a positive and significant impact on educational outcomes and, in line with the findings of other studies in the literature, we find no impact on self-reported measures of socio-emotional skills (e.g., grit and locus of control) and creativity. Our novel insight comes from the finding that the program has a significant impact on neurophysiological markers, decreasing arousal (a proxy of alertness), valence (a proxy for withdrawal from or approachability to an event or stimuli), and neuro-psychological changes to negative stimuli.