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

  • Parker, Simon C.

    ()

    (Western University, Canada)

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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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: Aug 2005
Date of revision:
Publication status: published in: Labour Economics, 2008, 15 (3), 515-537
Handle: RePEc:iza:izadps:dp1712
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  1. Holtz-Eakin, Douglas & Penrod, John R. & Rosen, Harvey S., 1996. "Health insurance and the supply of entrepreneurs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 209-235, October.
  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.
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  4. Lazear, Edward, 2003. "Entrepreneurship," IZA Discussion Papers 760, Institute for the Study of Labor (IZA).
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  7. 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.
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  12. Wong, Yue-chim, 1986. "Entrepreneurship, Marriage, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 693-99, November.
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  14. 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.
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  20. Macpherson, David A., 1988. "Self-employment and married women," Economics Letters, Elsevier, vol. 28(3), pages 281-284.
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  27. Michael P. Keane & Kenneth I. Wolpin, 1995. "The career decisions of young men," Working Papers 559, Federal Reserve Bank of Minneapolis.
  28. 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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  30. Bruce, Donald, 2002. "Taxes and Entrepreneurial Endurance: Evidence from the Self-Employed," National Tax Journal, National Tax Association, vol. 55(N. 1), pages 5-24, March.
  31. Parker, Simon C., 2005. "Entrepreneurship Among Married Couples in the United States: A Simultaneous Probit Approach," IZA Discussion Papers 1712, Institute for the Study of Labor (IZA).
  32. 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.
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