Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20562 
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion Papers No. 1296
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
An important finding in the rapidly growing literature on self-employment is that the probability of self-employment is substantially higher among the children of business owners than among the children of non-business owners. Using data from the confidential and restrictedaccess Characteristics of Business Owners (CBO) Survey, we provide some suggestive evidence on the causes of intergenerational links in business ownership and the related issue of how having a family business background affects small business outcomes. Estimates from the CBO indicate that more than half of all business owners had a self-employed family member prior to starting their business. Conditional on having a self-employed family member, less than 50 percent of small business owners worked in that family member's business suggesting that it is unlikely that intergenerational links in self-employment are solely due to the acquisition of general and specific business capital and that instead similarities across family members in entrepreneurial preferences may explain part of the relationship. In contrast, estimates from regression models conditioning on business ownership indicate that having a self-employed family member plays only a minor role in determining small business outcomes, whereas the business human capital acquired from prior work experience in a family member's business appears to be very important for business success. Estimates from the CBO also indicate that only 1.6 percent of all small businesses are inherited suggesting that the role of business inheritances in determining intergenerational links in self-employment is limited at best.
Subjects: 
business outcomes
family
self-employment
JEL: 
J23
Document Type: 
Working Paper

Files in This Item:
File
Size
405.19 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.