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Entrepreneurship among married couples in the United States: A simultaneous probit approach

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Parker, Simon C.

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Abstract

This article proposes a simultaneous probit equation framework to analyse the business ownership patterns of married couples in the United States. A structural model of knowledge spillovers within couples is formulated and estimated. Empirical analysis reveals significant and substantial positive interdependence of business ownership propensities within couples. This is consistent with a process in which both male and female spouses receive positive knowledge transfers from the other. Conversely, there is less support for alternative explanations of interdependent occupational choices based on assortative mating, role model effects, risk diversification, or intra-household wealth transfers. I conclude that the conventional practice of ignoring occupational interdependence can generate misleading conclusions about the determinants of business ownership in America.

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File URL: http://www.sciencedirect.com/science/article/B6VFD-4NCSGK9-1/1/96c1d10f35d93d2ae5c458a3201528c6
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Publisher Info
Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 3 (June)
Pages: 459-481
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Handle: RePEc:eee:labeco:v:15:y:2008:i:3:p:459-481

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  7. Blanchflower, David G & Meyer, Bruce D, 1994. " A Longitudinal Analysis of the Young Self-Employed in Australia and the United States," Small Business Economics, Springer, vol. 6(1), pages 1-19, February.
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  9. Bruce, Donald, 1999. " Do Husbands Matter? Married Women Entering Self-Employment," Small Business Economics, Springer, vol. 13(4), pages 317-29, December. [Downloadable!] (restricted)
  10. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January. [Downloadable!] (restricted)
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  15. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April. [Downloadable!] (restricted)
  16. Devine, Theresa J, 1994. "Changes in Wage-and-Salary Returns to Skill and the Recent Rise in Female Self-Employment," American Economic Review, American Economic Association, vol. 84(2), pages 108-13, May. [Downloadable!] (restricted)
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  18. Berliant, Marcus & Peng, Shin-Kun & Wang, Ping, 2002. "Production Externalities and Urban Configuration," Journal of Economic Theory, Elsevier, vol. 104(2), pages 275-303, June. [Downloadable!] (restricted)
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  19. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
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  20. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August. [Downloadable!] (restricted)
  21. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-35, May. [Downloadable!] (restricted)
  22. Robert W. Fairlie, 2004. "Recent Trends in Ethnic and Racial Business Ownership," Small Business Economics, Springer, vol. 23(3), pages 203-218, October. [Downloadable!]
  23. Holod, Dmytro & Reed, Robert III, 2004. "Regional spillovers, economic growth, and the effects of economic integration," Economics Letters, Elsevier, vol. 85(1), pages 35-42, October. [Downloadable!] (restricted)
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  1. Frank M. Fossen, 2007. "Risky Earnings, Taxation and Entrepreneurial Choice: A Microeconometric Model for Germany," SOEPpapers 29, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
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