Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm University, Swedish Institute for Social Research

No 8/2018: Same, but Different? Brith Order, Family Size, and Sibling Sex Composition Effects in Entrepreneurship

Theodor Vladasel
Additional contact information
Theodor Vladasel: Swedish Institute for Social Research, Stockholm University, Postal: SOFI, Stockholm University, SE-106 91 Stockholm, Sweden

Abstract: Family background matters for entrepreneurship. The focus on factors making siblings similar rather than different, however, may understate the total importance of families for occupational choice by hiding important sources of within-family heterogeneity. I assess the differential effects of birth order, family size, and sibling sex composition on unincorporated and incorporated entrepreneurship in a set of causal exercises using Swedish register data. These factors appear to have a negligible impact. First, while later born men are more likely to become unincorporated entrepreneurs, this effect is largely explained by their lower education and poorer labor market prospects, pointing towards the subsistence nature of this type of entrepreneurship. Second, I find limited evidence of causal family size effects in linear and non-linear instrumental variable approaches, using instruments based on multiple births and sibling gender. Third, while I find no pure sibling sex composition effect, there is a small negative effect of having a brother on the father-daughter association in unincorporated entrepreneurship. Fourth, neither source of within-family heterogeneity exhibits a clear relationship with incorporated entrepreneurship, although children with more than four siblings are less likely to become incorporated business owners. Finally, accounting for within-family differences increases previously estimated sibling correlations by little. The results are consistent with the absence of adult sibling peer effects in entrepreneurship and confirm the role of families in generating sibling similarities, rather than differences in occupational choice. The importance of family background for entrepreneurship is therefore only marginally understated.

Keywords: entrepreneurship; incorporation; self-employment; family background; birth order; family size; sibling sex composition

JEL-codes: D13; J62; L26

63 pages, August 23, 2018

Full text files

FULLTEXT01.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Stefan Englund ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-08-23 16:07:45.