What Makes an Entrepreneur? Evidence on Inheritance and Capital Constraints

31 Pages Posted: 5 Jul 2004 Last revised: 20 Jan 2006

See all articles by David G. Blanchflower

David G. Blanchflower

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER); University of Stirling - Department of Economics

Andrew J. Oswald

University of Warwick - Department of Economics; IZA Institute of Labor Economics

Date Written: February 1990

Abstract

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.

Suggested Citation

Blanchflower, David G. and Oswald, Andrew J., What Makes an Entrepreneur? Evidence on Inheritance and Capital Constraints (February 1990). NBER Working Paper No. w3252. Available at SSRN: https://ssrn.com/abstract=447254

David G. Blanchflower (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States
603-646-2536 (Phone)
603-646-2122 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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University of Stirling - Department of Economics ( email )

Stirling, FK9 4LA
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Andrew J. Oswald

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
523510 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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