The Role of Education and Learning by Experience in the Performance of Microenterprises

This paper evaluates the role of human capital in the productivity performance of Mexican microenterprises by estimating productivity functions using standard econometric techniques. Two sources of human capital are analyzed: formal education acquired at educational institutions and business experience of the entrepreneurs. The data is originated from a sample of microenterprises operating in challenged neighborhoods of the Mexican province of Baja California. The estimated productive structure of the enterprises in the sample and the effects of human capital, suggest that this source of capital plays a role not only in terms of determining the productivity level across enterprises but also in enhancing long run productivity, bringing some implications about the sources of productivity available in these enterprises and the orientation of the entrepreneurship policies for developing countries.