As kids, entrepreneurs are smarter, have two married & educated parents, are future-oriented…and bad

by Ryan Streeter on November 1, 2013. Follow Ryan on Twitter.

An interesting new study by Ross Levine and Yona Rubenstein looks at the differences between incorporated self-employed people, unincorporated self-employed people, and salaried employers.

They posit that the incorporated self-employed are entrepreneurs, which is a sensible and useful distinction.

They find that these individuals are more likely to grow up in homes with two married parents who have higher levels of education than the parents of salaried workers and unincorporated self-employed people. They also find that these individuals, as children, are smarter and more confident…and more likely to do “illicit” things like take things by force, break rules, steal, etc.

The authors write:

Individuals who become incorporated self-employed tend to display strikingly distinct cognitive, noncognitive, and family characteristics along four key dimensions before they enter the labor market (Panel D of Table 4). First, in terms of family background, the incorporated self-employed come from comparatively (1) high-income families as measured by family income in 1979, (2) well-educated families as measured by the education of the individualís parents, and (3)  stable families as measured by whether the individual lived in  a two parent family at the age of 14. Second, people that become incorporated self-employed had (1) higher ability as measured by large AFQT values, (2) stronger self-esteem as  measured by the high Rosenberg scores, and (3) a stronger sense that they control their futures, rather than having their futures determined by fate or luck, as measured by low  Rotter Locus of Control scores. Third, on career ambitions, individuals that later become ‬incorporated self-employed were almost twice as likely as others to have indicated that they  wanted to be managers or proprietors before  they entered the labor market. Fourth, people that spend more of their prime age working years as incorporated self-employed engaged in  more ‬illicit activities as youths.