Roads Leading to Self-Employment: Comparing Transgenerational Entrepreneurs and Self-Made Start-Ups

48 Pages Posted: 13 Jul 2015

See all articles by Boris F. Blumberg

Boris F. Blumberg

Maastricht University - Business Investment Research Center (BIRC)

Gerard A. Pfann

Maastricht University; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

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Date Written: July 2015

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 Classification: J24, J62, L26

Suggested Citation

Blumberg, Boris F. and Pfann, Gerard Antonie, Roads Leading to Self-Employment: Comparing Transgenerational Entrepreneurs and Self-Made Start-Ups (July 2015). CEPR Discussion Paper No. DP10699, Available at SSRN: https://ssrn.com/abstract=2630127

Boris F. Blumberg (Contact Author)

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

Gerard Antonie Pfann

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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