Self-Employment after Socialism: Intergenerational Links, Entrepreneurial Values, and Human Capital

Abstract:     
Drawing on representative household data from the German Socio-Economic Panel, we examine the role of an early precursor of entrepreneurial development – parental role models – for the individual decision to become self-employed in the post-unified Germany. The findings suggest that the socialist regime significantly damaged this mechanism of an intergenerational transmission of entrepreneurial attitudes among East Germans with a tertiary degree that have experienced a particularly strong ideological indoctrination. However, we find a significant and positive relationship between the presence of a parental role model and the decision to become self-employed for less-educated people. For West Germans the positive relationship holds irrespective of the level of education.

Number of Pages in PDF File: 19

Keywords: entrepreneurship, parental role models, human capital

JEL Classification: L26, Z1, D03

working papers series