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Entrepreneurship Among Married Couples in the United States: A Simultaneous Probit Approach

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Author Info
Simon C. Parker () (University of Durham and IZA Bonn)

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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. We argue that the evidence is consistent with both male and female spouses receiving positive knowledge transfers from the other. Conversely, there appears to be little support for alternative explanations of interdependent occupational choices based on assortative mating, role model effects, risk diversification, or intrahousehold wealth transfers. We 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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1712.

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Length: 50 pages
Date of creation: Jul 2005
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Handle: RePEc:iza:izadps:dp1712

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Related research
Keywords: entrepreneurship occupational choice family business ownership

Other versions of this item:

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. Greg Hundley, 2001. "Why Women Earn Less Than Men in Self-Employment," Journal of Labor Research, Transaction Publishers, vol. 22(4), pages 817-829, October. [Downloadable!] (restricted)
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  5. Williams, Donald R., 2002. "Returns to education and experience in self-employment: Evidence from Germany," IRISS Working Paper Series 2002-04, IRISS at CEPS/INSTEAD. [Downloadable!]
  6. Edward P. Lazear, 2004. "Balanced Skills and Entrepreneurship," American Economic Review, American Economic Association, vol. 94(2), pages 208-211, May. [Downloadable!] (restricted)
  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.
  8. William Gentry & R. Hubbard, 2004. "Entrepreneurship and Household Saving," Advances in Economic Analysis & Policy, Berkeley Electronic Press, vol. 4(1), pages 1053-1053. [Downloadable!] (restricted)
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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)
  11. Herbert J. Schuetze, 2006. "Income splitting among the self-employed," Canadian Journal of Economics, Canadian Economics Association, vol. 39(4), pages 1195-1220, November. [Downloadable!] (restricted)
  12. Lazear, Edward P., 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Kooreman, Peter, 1994. "Estimation of Econometric Models of Some Discrete Games," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(3), pages 255-68, July-Sept. [Downloadable!] (restricted)
  14. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-34, July-Sept. [Downloadable!] (restricted)
  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)
  17. Macpherson, David A., 1988. "Self-employment and married women," Economics Letters, Elsevier, vol. 28(3), pages 281-284. [Downloadable!] (restricted)
  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.
    Other versions:
  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!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Frank M. Fossen, 2007. "Risky Earnings, Taxation and Entrepreneurial Choice : A Microeconometric Model for Germany," Discussion Papers of DIW Berlin 705, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
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