Intergenerational Transmission of Self-Employed Status in the Informal Sector

Social reproduction is the highest for self-employed as shown by an extensive literature from developed and developing countries. Very few studies however document the reason for this high intergenerational correlation of the self-employed status. The purpose of this paper is to test if the second-generation of self-employed has an advantage related to the first-generation in the African context. It aims at highlighting the debate on firms heterogeneity in the informal sector, by identifying factors of informal business success. In addition, this paper seeks to contribute to understand the intergenerational transmission of inequalities. Using 1-2-3 surveys collected in the commercial capitals of seven West African countries in 2001-2002, this paper shows that the second-generation of informal self-employed does not have better outcomes than the first one, except when they choose a familial tradition in the same sector of activity. Thus, in the African context, having a self-employed father does not provide any advantage in terms of profit or sales and is not sufficient for the transmission of valuable skills. On the other hand, informal entrepreneurs who have chosen a specific enterprise based on familial tradition have a competitive advantage. Their competitive advantage is partly explained by the transmission of enterprise-specific human capital, acquired through experiences in the same type of activity and by the transmission of social capital that guarantees a better clientele and a reputation.

Bibliographic Details

Main Author:	Pasquier-Doumer, Laure
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2011-04
Subjects:	ACCESS TO CAPITAL, ACCESS TO CREDIT, ACCESS TO FINANCE, ACCESS TO FORMAL CREDIT, ACCOUNTS, ACCUMULATION RATE, ADVANCED ECONOMY, AGRICULTURAL ECONOMICS, BANK CREDIT, BANK POLICY, BARRIERS TO ENTRY, BIASES, BORROWING, BUSINESS ACTIVITY, BUSINESS ASSOCIATIONS, BUSINESS ECONOMICS, BUSINESS OWNERS, BUSINESS RISK, CAPACITY BUILDING, CAPITAL ACCUMULATION, CAPITAL CONSTRAINT, CAPITAL COST, CAPITAL INJECTION, CAPITAL MARKET, CAPITAL REQUIREMENTS, CAPITAL RETURNS, CAPITAL SHORTAGES, CAPITAL STOCK, CHECKS, COLLATERAL, CONTRACTUAL OBLIGATIONS, COST OF CAPITAL, CREDIT CONSTRAINED FIRMS, CREDIT CONSTRAINT, CREDIT HISTORY, CREDIT INSTITUTIONS, CREDIT MARKET, CREDIT RATIONING, DEGREES OF RISK, DEMOGRAPHIC CHARACTERISTICS, DEVELOPING COUNTRY, DEVELOPMENT ECONOMICS, DIVERSIFICATION, DUMMY VARIABLE, DURABLE, DURABLE GOODS, EARNINGS, ECONOMETRIC MODELS, ECONOMIC CONSTRAINTS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC POLICIES, ECONOMIC STATISTICS, ENDOWMENTS, ENTERPRISE PERFORMANCE, ENTREPRENEUR, ENTREPRENEURIAL ACTIVITY, ENTREPRENEURS, ENTRY BARRIERS, EQUIPMENT, EXCESSIVE RISK, EXPECTED UTILITY, EXPECTED VALUE, EXPENDITURE, EXTERNAL FINANCE, FAMILY FINANCE, FAMILY LOANS, FARMERS, FEMALE ENTREPRENEURS, FINANCIAL MEANS, FINANCIAL RESOURCES, FINANCIAL SUPPORT, FIXED COSTS, FORMAL BANKS, GDP, GROUP OF FIRMS, GROWTH THEORY, HIGH INTEREST RATES, HOLDING, HOUSEHOLD WEALTH, HOUSEHOLDS, HUMAN CAPITAL, INCOME GROWTH, INFORMATION ASYMMETRIES, INFORMATION ON ENTREPRENEURS, INFORMATION ON INVESTMENT, INSTRUMENT, INSURANCE, INSURANCE MARKET, INSURANCE PRODUCTS, INTEREST RATE, INTERNAL FINANCE, INTERNAL FUNDS, INVENTORY, INVESTING, INVESTMENT BEHAVIOR, JOB CREATION, LABOR FORCE SURVEY, LABOR MARKET, LACK OF ACCESS, LEVEL OF RISK, LIQUID WEALTH, LIQUIDITY, LIQUIDITY CONSTRAINT, LIQUIDITY PREMIUM, LIQUIDITY PROBLEMS, LOAN, LOTTERY, MARGINAL COST, MARGINAL PRODUCT, MARGINAL UTILITY, MARGINAL UTILITY OF CONSUMPTION, MARKET CONSTRAINTS, MARKET ECONOMY, MARKET FAILURE, MARKET INTEREST RATE, MICRO DATA, MICRO ENTERPRISES, MICRO-CREDIT, MICRO-ENTERPRISE, MICRO-FINANCE, MICRO-FINANCE INSTITUTIONS, MICROCREDIT, MICROENTERPRISES, MIDDLE INCOME COUNTRIES, MONEY LENDERS, MONEYLENDERS, MORAL HAZARD, OPPORTUNITY COST, PHYSICAL CAPITAL, POLITICAL ECONOMY, PORTFOLIO, PRICE RISK, PRICE UNCERTAINTY, PRODUCTION FUNCTION, PRODUCTIVE INVESTMENT, PROFITABILITY, PURCHASING POWER, PURCHASING POWER PARITY, RATE OF RETURN, RECEIPTS, REINVESTMENT, RETAINED EARNINGS, RISK AVERSION, RISK PERCEPTIONS, RISK PREMIUM, RISK-AVERSE INDIVIDUALS, SAFE ASSET, SAVINGS, SELF-EMPLOYMENT, SMALL BUSINESS, SMALL ENTERPRISES, SMALL-SCALE ENTREPRENEURS, SOURCE OF CREDIT, SOURCES OF FINANCE, START-UP, TAX, TAXIS, TRADE SECTOR, TRADING, TRANSITION COUNTRY, TRANSITION ECONOMY, TRUST FUND, UNION, VALUE ADDED, WEALTH,
Online Access:	http://documents.worldbank.org/curated/en/616601468319738792/Intergenerational-transmission-of-self-employed-status-in-the-informal-sector-a-constrained-choice-or-better-income-prospects-Evidence-from-seven-West-African-countries https://hdl.handle.net/10986/27309
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