Intergenerational correlation in self employment: some further evidence from French ECHP data |
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Authors: | Nathalie Colombier David Masclet |
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Institution: | (1) CNRS, CREM, 7 place Hoche, 35065 Rennes, France;(2) CIRANO, Montreal, Canada |
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Abstract: | Previous empirical work has shown that self-employment is correlated across generations, so that the children of the self-employed
are themselves more likely to be self-employed. However, the reason for this intergenerational correlation remains unclear.
This paper contributes to the existing literature in two ways. First, using French data from the European Community Household
Panel Survey, we provide a further examination of this intergenerational correlation among the self-employed. In particular
we investigate to what extent the intergenerational correlation in self-employment reflects occupational following. The second
contribution of our paper is to investigate the differences between first- and second-generation self-employed workers and
their possible explanations. Even though our results indicate that having self-employed parents increases the probability
of being self-employed, irrespective of occupation, we do observe that a large majority of individuals enter the same (or
very similar) occupation as their parents, which is consistent with occupational following. Our results also reveal some differences
between the first- and second-generation self-employed. Formal education is more important for the first-generation self-employed
(those whose parents are not self-employed) than for the second-generation self-employed. Further, the first-generation self-employed,
who received less informal human capital than the second-generation self-employed, compensate for this shortcoming by acquiring
more formal education.
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Keywords: | Self-employment Intergenerational Correlation Social Environment Human Capital |
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