Closure and Exposure: Mechanisms in the Intergenerational Transmission of Self-employment

Children of the self-employed are twice as likely as other children to enter into self-employment themselves. A variety of different mechanisms have been proposed to explain the intergenerational transmission of self-employment, but current empirical research has been unable to assess their empirical validity. I use unique life history data to examine the impact of parental self-employment on the transition to self-employment in Denmark and assess the different mechanisms identified in the literature. The results suggest that parental role modeling is an important source of the transmission of selfemployment. However, there is little evidence to suggest that children of the selfemployed enter self-employment because they have privileged access to their parent’s financial or social capital, or because they have superior entrepreneurial abilities.