Why do entrepreneurial parents have entrepreneurial children?

We explore the origins of the intergenerational association in entrepreneurship using Swedish adoption data that allow us to quantify the relative importance of pre-birth and post-birth factors. We find that parental entrepreneurship increases the probability of children’s entrepreneurship by about 60%. For adoptees, both biological and adoptive parents make significant contributions to this association. These contributions, however, are quite different in size. Post-birth factors account for twice as much as pre-birth factors in our decomposition of the intergenerational association in entrepreneurship. We investigate several candidate explanations for this large post-birth factor and present suggestive evidence in favor of role modeling.