Économie et Statistique n° 405 - Firms

Economie et Statistique
Paru le : 01/02/2008
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The Importance of Family Environment as a Determiner of Self-Employment

Nathalie Colombier et David Masclet

Economic literature has given great prominence to the micro-economic reasons behind an individual's decision to become "self-employed". Several empirical studies highlight the determining role of one's financial situation, level of education and family environment. Lafferrère (1998) notes that the probability of being self-employed is positively correlated with one or both of one's parents being self-employed workers. Several papers explain this intergenerational correlation of self-employment by underlining the opportunity which self-employed parents have to transfer informal human capital to their children (Dunn and Holtz-Eakin, 2000). This article focuses more closely on identifying the role played by family environment. Parents on the whole are not happy merely to pass on to their children specific skills in a given business area, but also a number of managerial abilities which are not specific to a particular profession. Self-employed parents therefore pass on to their children an «ability to think» (management skills, capacity to work independently, etc), thus making it possible to work for oneself whatever the profession the child envisages. The micro-economic reasons behind the decision to become self-employed differ depending on whether the individuals have received intergenerational transfers from self-employed parents. For example, the level of formal education is more of a determiner for the first generation of self-employed workers (those parents are not self-employed) than for second-generation self-employed workers (those whose parents are self-employed).

Economie et Statistique
No 405-406
Paru le : 01/02/2008