Intergenerational correlation in self employment: some further evidence from French ECHP data

Intergenerational correlation in self employment: some further evidence from French ECHP data Previous empirical work has shown that self-employment is correlated across generations, so that the children of the self-employed are themselves more likely to be self-employed. However, the reason for this intergenerational correlation remains unclear. This paper contributes to the existing literature in two ways. First, using French data from the European Community Household Panel Survey, we provide a further examination of this intergenerational correlation among the self-employed. In particular we investigate to what extent the intergenerational correlation in self-employment reflects occupational following. The second contribution of our paper is to investigate the differences between first- and second-generation self-employed workers and their possible explanations. Even though our results indicate that having self-employed parents increases the probability of being self-employed, irrespective of occupation, we do observe that a large majority of individuals enter the same (or very similar) occupation as their parents, which is consistent with occupational following. Our results also reveal some differences between the first- and second-generation self-employed. Formal education is more important for the first-generation self-employed (those whose parents are not self-employed) than for the second-generation self-employed. Further, the first-generation self-employed, who received less informal human capital than the second-generation self-employed, compensate for this shortcoming by acquiring more formal education. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Intergenerational correlation in self employment: some further evidence from French ECHP data

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Publisher
Springer US
Copyright
Copyright © 2007 by Springer Science+Business Media, LLC
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-007-9059-9
Publisher site
See Article on Publisher Site

Abstract

Previous empirical work has shown that self-employment is correlated across generations, so that the children of the self-employed are themselves more likely to be self-employed. However, the reason for this intergenerational correlation remains unclear. This paper contributes to the existing literature in two ways. First, using French data from the European Community Household Panel Survey, we provide a further examination of this intergenerational correlation among the self-employed. In particular we investigate to what extent the intergenerational correlation in self-employment reflects occupational following. The second contribution of our paper is to investigate the differences between first- and second-generation self-employed workers and their possible explanations. Even though our results indicate that having self-employed parents increases the probability of being self-employed, irrespective of occupation, we do observe that a large majority of individuals enter the same (or very similar) occupation as their parents, which is consistent with occupational following. Our results also reveal some differences between the first- and second-generation self-employed. Formal education is more important for the first-generation self-employed (those whose parents are not self-employed) than for the second-generation self-employed. Further, the first-generation self-employed, who received less informal human capital than the second-generation self-employed, compensate for this shortcoming by acquiring more formal education.

Journal

Small Business EconomicsSpringer Journals

Published: Jul 17, 2007

References

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