Previous empirical work has shown that self-employment is correlated across generations, so that the children of the self-employed are themselves more likely to be self-employed. However, the reason for this intergenerational correlation remains unclear. This paper contributes to the existing literature in two ways. First, using French data from the European Community Household Panel Survey, we provide a further examination of this intergenerational correlation among the self-employed. In particular we investigate to what extent the intergenerational correlation in self-employment reflects occupational following. The second contribution of our paper is to investigate the differences between first-and second-generation self-employed workers and their possible explanations. Even though our results indicate that having self-employed parents increases the probability of being self-employed, irrespective of occupation, we do observe that a large majority of individuals enter the same (or very similar) occupation as their parents, which is consistent with occupational following. Our results also reveal some differences between the first-and second-generation self-employed. Formal education is more important for the first-generation self-employed (those whose parents are not self-employed) than for the secondgeneration self-employed. Further, the firstgeneration self-employed, who received less informal human capital than the second-generation selfemployed, compensate for this shortcoming by acquiring more formal education.
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ABSTRACTNever the Same After the First Time: The Satisfaction of the Second-Generation Self-Employed * Previous empirical work has shown that the self-employed are generally more satisfied than salaried workers. This paper contributes to the existing literature in two ways. First, using French data from the ECHP and British data from the BHPS, we investigate the domains over which this differential operates. We show that, after controlling for occupation, selfemployed workers are generally more satisfied with working conditions and pay, but less satisfied than employees with respect to job security. We then consider the differences between the first-and second-generation self-employed. The first-generation self-employed (those whose parents were not self-employed) are more satisfied overall than are the second-generation self-employed. We argue that this finding is consistent with the selfemployed partly comparing their labor market outcomes with those of their parents, as well as parental transfers which loosen the self-employment participation constraint. This result is found in both pooled and panel analysis.
JEL Classification:J20, J21, J23, J24
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