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Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links

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  • Dunn, Thomas
  • Holtz-Eakin, Douglas

Abstract

We use data from the National Longitudinal Surveys to investigate the relative importance of family financial and human capital in the transition into self-employment. Specifically, we estimate the impacts of individual's own wealth and human capital and parental wealth and self-employment experience on the probability that an individual transits from wage-and-salary to self-employment. We find young men's own financial assets exert a statistically significant but quantitatively modest effect on the transition. In contrast, the parents' capital exerts a large influence. Parents' strongest effect runs, not through financial means, but rather through their own self-employment experience and business success. Copyright 2000 by University of Chicago Press.

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  • Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
    • Handle: RePEc:ucp:jlabec:v:18:y:2000:i:2:p:282-305
    DOI: 10.1086/209959
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