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Entrepreneurship is Contagious

July 27, 2020

This post examines whether entrepreneurs are influenced by their fathers, mothers, spouses, and siblings. The General Social Survey (GSS) reports statistics on those who are self-employed. The data show that, overall, the percentage of respondents who indicated they were self-employed has not changed perceptibly between 1972 and 2018. Figure 1, below, shows that the percent who reported they were self-employed hovered around an average of 11.4% across all years.

Perhaps the greatest entrepreneurial influence on a respondent comes from his father. If a respondent is self-employed, 44.19% of the time his father is also self-employed. If the respondent works for someone else, his father is self-employed only 26.79% of the time. Whether a respondent’s father is self-employed is a statistically significant factor in determining whether the respondent, himself, is self-employed.

The sheer number of respondents who claim their father is self-employed, however, is declining rather precipitously. Figure 2, below, shows whether a respondent’s father was self-employed between 1972 and 2018. In 1972, 37% of respondents said their father was self-employed. By 2018, only 24% of respondents said their father was self employed.

Mothers have a statistically significant impact on whether a respondent is self-employed or not, but the magnitude of the influence is smaller than a father’s influence. If a respondent is self-employed, 18.71% of the time his mother is self-employed as well. If the respondent is not self-employed, 10.61% of the time his mother is self-employed. A mother’s influence, therefore, is a statistically significant factor in whether or not her children are self-employed or not.

Between 1994 and 2018, the amount of respondents who reported their mother was self-employed dropped slightly. In 1994, 12.7% reported their mothers were self-employed. By 2018, the percentage dropped to 10.23 percent–for a difference of approximately 2.5%.

It seems that respondents who are self-employed tend to partner with spouses who are also self-employed as well. If a respondent is self-employed, 30.13% of the time the spouse is self-employed, too. If a respondent works for someone else, 10.28% of the time the spouse is self-employed. Therefore, respondents who are self-employed tend to partner with self-employed spouses. This tendency is statistically significant.

The percentage of spouses who are self-employed has not changed perceptibly between 1972 and 2018. Figure 4, below, shows the trend line across the years for percent who report their spouses are self-employed. In 1972, 11.7% of respondents reported their spouses are self-employed. In 2018, 11.9% of respondents had self-employed spouses. Therefore, the percent of spouses who are self-employed has remained constant.

The influence of siblings on a respondents likelihood of being an entrepreneur is also statistically significant. If a respondent is self-employed, 21.29% of the time his siblings are also self-employed. If a respondent works for someone else, 13.20% of the time the sibling is self-employed. The difference is statistically significant.

Finally, if a respondent is self-employed, 19.25% of the time their first job was self-employed. If a respondent worked for someone else, 2.52% of the time their first job was self-employed. Therefore, those who started out being self-employed have a greater chance that they remain entrepreneurs.

This analysis shows that entrepreneurship is contagious, in that a person’s family influences whether or not they are self-employed. Fathers and spouses tend to have the greatest significance on whether a respondent will become an entrepreneur. They are followed by mothers and siblings. This suggests that entrepreneurs are shaped by the people that surround them.

Source: https://gssdataexplorer.norc.org/variables/vfilter?utf8=%E2%9C%93&user_search_id=&state_id=&search_type=&keyword=self+employed&doslider=1&yrmin=1972&yrmax=2018&years=&subjects=&ssearch=&commit=SEARCH&page_v=1#var_47

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