NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

What Makes an Entrepreneur? Evidence on Inheritance and Capital Constraints

David Blanchflower, Andrew J. Oswald

NBER Working Paper No. 3252
Issued in February 1990
NBER Program(s):   LS

The paper studies the factors which shape entrepreneurship among young adults. It finds, using data on a British birth cohort, that the probability of self-employment depends sensitively upon whether the individual ever received a gift or inheritance. Those who were given or inherited £5,000, for example, were approximately twice as likely, ceteris paribus, to set up in business. This is consistent with, and a new test of, recent results from the US stressing the importance of capital and liquidity constraints. The paper also evaluates a number of hypotheses suggested in the literature on small businesses.

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Document Object Identifier (DOI): 10.3386/w3252

Published: Blanchflower, David G. and Andrew J. Oswald. "What Makes An Entrepreneur?," Journal of Labor Economics, 1998, v16(1,Jan), 26-60.

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