Like Father, Like Son?

A recent study conducted by Ohio State University gives new meaning to the notion that parents set strong examples for their children. The survey, analyzed by economists Thomas A. Dunn and Douglas Holtz-Eakin at Syracuse University, reveals that parents' actions have a direct influence on their kids becoming entrepreneurs.

According to the findings, sons were nearly three times as likely to become self-employed if their fathers were self-employed; 32 percent of those with entrepreneurial fathers started a business, compared with only 12 percent of sons without self-employed fathers. Similarly, 24 percent of daughters with entrepreneurial mothers also donned entrepreneurial hats, while just 13 percent of daughters whose mothers weren't self-employed did so.

Some might say it's simply a case of children following in their parents' footsteps. However, the data found that among sons with entrepreneurial fathers, only 10 percent entered into a business in the same line of work--virtually identical to those sons whose fathers weren't self-employed.

Likewise, the study also suggests there's little truth to the idea that children of entrepreneurs start more businesses because they receive funding from their parents. What's more likely the case is the attitudes entrepreneurial parents impart, such as the value of being your own boss, or specific talents they pass on, such as management or interpersonal skills, are what lead their children into business. In other words, it's the "human capital," says Dunn, not the financial capital, that makes the difference.

This article was originally published in the May 1997 print edition of Entrepreneur with the headline: Like Father, Like Son?.