Working Paper: CEPR ID: DP10699
Authors: Boris Blumberg; Gerard Pfann
Abstract: This paper studies the event history of business foundation and distinguishes between transgenerational entrepreneurship and self-made start-ups. Three theoretical concepts of human, financial and social capital are linked to investigate variations over time in the decision process to become self-employed. Data from a cohort of Dutch inhabitants born in 1939/1940 who have been interviewed three times during their lives in 1952, 1983, and 1993 allows testing theoretical hypotheses that state clear differences between these two paths towards business ownership. Empirical results show that the base-line hazard of individuals without self-employed parents increases with time, while people with entrepreneurial parents become self-employed at an early age. Moreover, social capital is a better predictor of enterprise than human capital.
Keywords: entrepreneurship; occupational choice; self-employment; transgenerational mobility
JEL Codes: J24; J62; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental entrepreneurial background (L26) | Timing of self-employment (L26) |
| Presence of self-employed parents (J12) | Likelihood and timing of entering self-employment (L26) |
| Self-employed parents (J22) | Shortened gestation period for offspring entering self-employment (L26) |
| Vocational education (J24) | Self-employment (particularly for those with self-employed parents) (L26) |
| Higher education (I23) | Self-employment (less direct effect) (J23) |
| Family business successors (M13) | Chances of entering self-employment over time (L26) |
| Startup entrepreneurs (M13) | Chances of entering self-employment over time (L26) |