Why Do Entrepreneurial Parents Have Entrepreneurial Children?

Matthew Lindquist, Joeri Sol (j.sol@uva.nl) and Mirjam Praag
Additional contact information
Joeri Sol: University of Amsterdam

No 6740, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Parental entrepreneurship is a strong, probably the strongest, determinant of own entrepreneurship. We explore the origins of this intergenerational association in entrepreneurship. In particular, we identify the separate effects of pre- and post-birth factors (nature and nurture), by using a unique dataset of Swedish adoptees. Its unique characteristic is that it not only includes data on occupational status for the adoptees and their adoptive parents, but also for their biological parents. Moreover, we use comparable data on entrepreneurship for a large, representative sample of the Swedish population. Based on the latter sample, and consistent with previous findings, we show that parental entrepreneurship increases the probability of children's entrepreneurship by about 60%. We further show that for adoptees, both biological and adoptive parents make significant contributions. These effects, however, are quite different in size. The effect of post-birth factors (adoptive parents) is approximately twice as large as the effect of pre-birth factors (biological parents). The sum of these two effects for adopted children is almost identical to the intergenerational transmission of entrepreneurship for own-birth children. We explore several candidate explanations for this important post-birth effect and present suggestive evidence in favor of role modeling.

Keywords: adoption; entrepreneurship; self-employment; intergenerational mobility; occupational choice; role model (search for similar items in EconPapers)
JEL-codes: J24 J62 L26 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2012-07
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published - published in: Journal of Labor Economics, 2015, 32 (2), 269–296

Downloads: (external link)
https://docs.iza.org/dp6740.pdf (application/pdf)

Related works:
Journal Article: Why Do Entrepreneurial Parents Have Entrepreneurial Children? (2015)
Working Paper: Why do Entrepreneurial Parents have Entrepreneurial Children? (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6740

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
library@iza.org

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte (hinte@iza.org).