Thursday, May 7, 2009

Family and Entrepreneurship

This brief essay points out the vital role of the family in transmitting business skills to the next generation. When entrepreneurs work in a family business before starting their own business, these new businesses are 10 to 40 percent more successful than they would otherwise be (that is one heck of a range, but that's beside the point). So it appears that much entrepreneurial skill is transmitted outside of a classroom; no big shock there. This is the primary reason I have very little good to say about child labor laws.

The most troubling aspect comes in when considering the weak family bonds many possess. For instance, the black rate of business ownership is below that of whites. How much of this is due to a distressingly low number of black children having the opportunity to work in family businesses? This creates a self perpetuating cycle. The current generation has a low rate of business ownership and thus the next generation has a lower rate of business ownership and thus fewer opportunities in life.

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