Self-Employment, Family Background, and Race

40 Pages Posted: 20 Mar 2000 Last revised: 13 Oct 2010

See all articles by Michael Hout

Michael Hout

University of California, Berkeley

Harvey S. Rosen

Princeton University - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 1999

Abstract

We focus on the intergenerational transmission of the propensity to be self-employed. Our emphasis is on the role of family background, and in particular, on what we call the intergenerational pick-up rate with respect to self-employment, the probability that a person with a self-employed parent will become self-employed him or herself. We use the General Social Survey, a data source with rich information on individuals' family histories, to investigate how family background affects self-employment probabilities and to document how racial and ethnic groups differ with respect to the intergenerational pick-up rate. We confirm earlier findings that father's self-employment status is an important determinant of offspring's self-employment outcomes. New results include: 1) The impact of paternal self-employment differs by race. 2) Even independent of father's occupation, family structure plays a role. 3) Blacks have lower self-employment rates than whites in part because they have different family structures; still, within each family type, blacks have lower self-employment rates. 4) Extrapolating current patterns into the future, there is no indication that black and white self-employment rates will converge any time soon. 5) The relatively high self-employment rates of immigrants carry into the next generation, but not beyond that. 6) Male immigrants who have self-employed fathers re no more likely to be self-employed than other immigrants.

Suggested Citation

Hout, Michael and Rosen, Harvey S., Self-Employment, Family Background, and Race (September 1999). NBER Working Paper No. w7344, Available at SSRN: https://ssrn.com/abstract=194851

Michael Hout

University of California, Berkeley ( email )

Survey Research Center
Berkeley, CA 94720
United States

Harvey S. Rosen (Contact Author)

Princeton University - Department of Economics ( email )

001 Fisher Hall
Princeton, NJ 08544
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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