Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links / Thomas Dunn, Douglas Holtz-Eakin.

Format:

Book

Author/Creator:

Dunn, Thomas.

Contributor:

National Bureau of Economic Research.

Holtz-Eakin, Douglas.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5622.

NBER working paper series no. w5622

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Financial Capital, Human Capital, and the Transition to Self-Employment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

The environment for business creation is central to economic policy, as entrepreneurs are believed to be forces of innovation, employment and economic dynamism. We use data from the National Longitudinal Surveys (NLS) to investigate the relative importance of financial and human capital exploiting the variation provided by intergenerational links. Specifically, we estimate the impacts of parental wealth and human capital on the probability that an individual will make the transition from a wage and salary job to self-employment. We find that young men's own financial assets exert a statistically significant, but quantitatively modest effect on the transition to self-employment. In contrast, the capital of parents exerts a large influence. Parents' strongest effect runs not through financial means, but rather through human capital, i.e., the intergenerational correlation in self-employment. This link is even stronger along gender lines.

Notes:

Print version record

June 1996.