Intergenerational correlation of self-employment in Western Europe

Abstract

Existing research has focused on factors explaining why individuals become self-employed. Self-employment may represent a significant proportion of total employment in many countries, and the intergenerational correlation of self-employment has been used as an explanatory factor, although findings differ across countries, methods, and strategies. Using data from the European Union Statistics on Income and Living Conditions (EU-SILC), we analyze the existence of intergenerational correlations of self-employment in nine European countries, using information on the current self-employment status of respondents, and that of their parents when the respondents were 14 years old. We show that this correlation is statistically significant in general terms. Furthermore, the transmission is especially important between fathers and sons. We also contribute reporting differences in these correlations across countries. The transmission is partially explained by a country's legal context for self-employment, and by its entrepreneurial culture, with the former being more important than the latter.