similarities in tastes for the self-employed lifestyle drives the relationship between
parents' and children's self-employment propensities.
The CBO also contains information on whether the owner previously worked "for
a business whose goods/service(s) were similar to those provided by this business "(U.S.
Department of Commerce 1997, p. C-4). This type of work experience undoubtedly
provides opportunities for acquiring job- or industry-specific business human capital in
addition to more general business human capital. Slightly more than half of all small
business owners report working in a similar business prior to starting their business.
Among owners who worked in a family member's business, 55.8 percent report
working in a business that provided similar goods and services. Unfortunately, however,
we cannot ascertain whether the family member's business is the same as the business
providing similar goods and services. Therefore, our estimate only provides an "upper
bound" estimate of the percent of owners who acquired specific business human capital
from working in a family member's business. Nevertheless, the estimate of roughly 50
percent suggests that family businesses are providing opportunities to acquire general
business human capital and not just specific business human capital. This finding is
consistent with the finding in Dunn and Holtz-Eakin (2000) that self-employed sons
follow their father's occupation in only 32 percent of cases.
Another explanation is that the children of self-employed business owners
become partners with their parents or directly inherit businesses. Forming a partnership
with a child may represent a less expensive, especially in terms of capital, method of
helping their children become business owners. Also, partnerships and inheritances may