What Makes an Entrepreneur? Evidence on Inheritance and Capital Constraints
NBER Working Paper No. 3252
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.
Published: Blanchflower, David G. and Andrew J. Oswald. "What Makes An Entrepreneur?," Journal of Labor Economics, 1998, v16(1,Jan), 26-60.